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The Public Service Loan Forgiveness Program and its broken promises

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The Public Service Loan Forgiveness Program and its broken promises

Back in 2007, lawmakers saw a need to draw people into careers that they considered critical but happened to pay low wages; because of this, Congress created a program that focused on loan forgiveness for students; more specifically, the program promised to wipe the remainder of student loans that a person had if they complied with the program for ten years and kept up their loan payments during that time. In accordance with this program, loan servicers kept telling students that they would qualify for such relief after a decade; but that did not turn out to be the case. Precisely who deserves to be blamed for this on various factors but a lot of people have blamed the loan servicers involved, the company that was in charge of the program, and the Education Department. If you are one of the people affected by this, you might want to talk to a New Jersey bankruptcy attorney.

The sad reality

Of all the students who took on enormous student loans and low paying careers believing that the government would forgive their loans after a decade of service, less than 1 percent have been deemed to be eligible for the Public Service Loan Forgiveness program and that is truly sad because every single person who has been affected feels that he or she was misled or even lied to; and this has led to many lawsuits. The first deadline for applicants was in 2017; there were 28,000 applicants and a rejection rate of more than 99%. As a response to this, Congress created an emergency measure that also saw a 99% rejection rate. One has to wonder if they really thought everything through while creating this emergency measure because it sure does not look that way. It should be noted that most rejections happened because people chose a loan or repayment plan that did not actually qualify for the Public Service Loan Forgiveness program either because they were misled or those who advised them did not fully understand the rules.

The Department of Education

For its part, the Department of Education simply states that it has been acting in accordance with the law as it was passed. But critics (lawmakers among them) state that the Department of Education has done nothing to improve what it could.

 The Pennsylvania Higher Education Assistance Agency

The Pennsylvania Higher Education Assistance Agency is the loan servicer that was hired to manage the Public Service Loan Forgiveness program but clearly did a very poor job of it. Despite their failure to do a good job, this loan servicer has made more than $1.3 billion dollars over the past decade from this position. Even worse than that, the Pennsylvania Higher Education Assistance Agency has not been punished in any way for its failures.

Legal advice

If you have been denied for the Public Service Loan Forgiveness program, perhaps even causing you to consider bankruptcy, you should seek legal advice. Click here for more: https://georgettemillerlaw.com/locations/new-jersey/

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Update March 22, 2020: We are fully operational at this time as we are able to continue working remotely and filing electronically. Contact us today to schedule a meeting or consultation via video chat.