(NerdWallet) — After 28 years of payments, high school history teacher Dawn Snowden-Frost took a dim view of her student loan debt, which had ballooned over the decades to six figures.
“I always thought, ‘I’m going to die on these loans,'” says Snowden-Frost, who teaches at the Burbank Unified School District in Burbank, Calif. “I will have student loans until I die and I will die in my class because I will never retire.”
But Snowden-Frost’s prediction was wrong. The rest of its six-figure loan debt was discharged this year through Civil Service Loan Forgiveness – in particular through the PSLF waiver which is currently in effect and accounts for particular types of past payments which are not normally not counted.
“It’s always been there, this big sum of money that I have to keep paying that will never be paid,” says Snowden-Frost. “Without [PSLF], I would never have paid it; there is no way out of this debt.
This new feeling? “It’s freedom,” she says.
A loaded program gets temporary buffs
Snowden-Frost is one of the lucky ones: Most of those who apply for the notoriously hard-to-get civil service loan forgiveness program are turned down.
Obtaining full debt discharge requires 120 qualifying payments made while working full-time for a qualifying employer, such as a public school, public hospital, qualifying nonprofit organization, or the government.
Borrowers have been on their own fighting, sometimes for years, to have payments count towards the total of 120 needed to cancel their remaining debt.
The PSLF has been in place since 2007, but it has fallen short: from November 9, 2020 to October 2021, when the waiver was put in place, only 2.4% had been approved among all applications , according to federal data from the Department of Educational Entertainment. However, the waiver allowed approvals to increase: In April 2022, federal data shows that 10% of applicants had their debt forgiven.
Following public criticism, the Biden administration sought to make temporary improvements in an effort to fix some of the flaws in the execution of the original program. Therefore, the PSLF waiver: it offers borrowers the opportunity to receive credit for past payments that have not met strict program rules. It launched in October 2021 and is available to borrowers until October 31, 2022.
Absence of long-term debts
“I’ve had these loans forever,” says Snowden-Frost. “I don’t really have a bad scare story. I was very lucky that a friend told me about PSLF. I had just plugged in.
Snowden-Frost’s PSLF application process was simpler than most borrowers’, but its nearly 30-year loan repayment experience was anything but smooth.
Snowden-Frost graduated from UCLA in 1987 with minimal loans and incurred most of her $57,000 debt from law school at Loyola Law School in Los Angeles in 1993. She began paying her student loan while working as a lawyer and earning a salary of $70,000. But the amount of his payment was high: $500 a month (about $1,000 in today’s dollars).
“It doesn’t look like much today, but it was a lot,” she said. When she changed professions after five years in law, she had a much harder time making payments.
As a teacher, she was not paid during the summer, so she often asked for abstention. During these breaks, interest accrues and is added to the principal when payments resume.
Snowden-Frost says she struggled to pay for 14 years, which included transferring her loans in 2010 when the federal government’s loan system changed; instead of the government guaranteeing its loans, it now owned its debt. She was pressured into abstaining by her student loan officer soon after. “I thought I’d be stuck with these loans forever, so I thought what another year?” she says.
Over time, his loans have tripled. She had a 9% interest rate and the monthly payments she was making couldn’t touch her balance. In 2010, a colleague told him about PSLF. She signed up for income-contingent reimbursement to ensure that her future payments would be eligible for future discharge.
“My only concern was that the program wouldn’t exist when I made my last payment,” says Snowden-Frost. She says concern over the repeal of the PSLF was very much on her mind, but it kept her vigilant about updates to the program.
In the fall of 2021, she heard about the PSLF waiver. After applying, she waited three months before being told she had 31 payments left. But that count was wrong, she said. She backed up and, of course, she was much closer.
“That’s when I called and they said, ‘Your loans are cancelled.’ I was screaming in my room,” says Snowden-Frost. “I didn’t even know what to do. I thought, ‘I don’t know how it’s possible, but it’s an incredible feeling.’ »
Snowden-Frost still didn’t quite believe it until she received her official letter in February, and by early March her account reflected the discharge. After 28 years of paying off its loans, Snowden-Frost has seen $175,749.92 in debt disappear.
“It changes my life because I have no debt. I can think of retirement. I can think of a real estate investment. I can think of something else to invest my money in,” she says. “I am 57 years old. It’s not like I’m buying a house with a 30-year mortgage; I was never able to buy a house because my student loan payments were mortgages on the house.
How to obtain the PSLF exemption
More than 128,000 borrowers have seen a collective debt of $8 billion canceled thanks to the temporary waiver. If you think you might qualify for the PSLF through the waiver, there is no downside to applying.
The PSLF waiver counts past payments that were not previously eligible, including:
- Late payments.
- Payments less than total amount due.
- Payments made on the incorrect reimbursement plan.
- Payments made on loans that were not previously eligible, such as those from the Federal Family Education Loans Program or Perkins Loans.
- Payments not made during forbearance periods of 12 consecutive months or more.
- Months spent in adjournment, other than academic adjournment, before 2013.
Use the PSLF help tool to search for an eligible employer and generate a form. It has been updated to align with the waiver.
To qualify, borrowers must already have direct loans or must consolidate their federal debt into a new direct loan. The consolidation step is essential: borrowers can submit a combined PSLF/employer certification form prior to consolidation, but they must consolidate to be eligible for the forgiveness. To find out if you qualify for additional payments and to learn more about the waiver, log on to the federal student aid website.
If you hope to get the waiver, be sure to submit it before it expires on October 31.
There are also other potential fixes to the PSLF program in the works. The Department of Education recently proposed regulatory changes that would automate some program functions and allow more payments to qualify for the PSLF, including lump sum payments, partial payments, late payments, and certain types of breaks. Additionally, a new bill – the Simplifying and Strengthening PSLF Act, introduced by Rep. Joe Courtney, D-Conn., and Sen. Sheldon Whitehouse, DR.I. – would reduce the number of payments needed to qualify, allow any repayment period to count towards discharge and more.