PSLF Achieved with Danielle & Katie
This month, we’re focused on a subject that’s important for over 43 million Americans: student loan debt. Because of COVID-19, the federal government gave student loan borrowers a three-year reprieve on payments; however, this month, they are returning.
There are several repayment options for federal student loan debt, and today, we are sharing with you some positive news and motivation for people who may qualify for the forgiveness programs available. Joining today are Danielle and Katie, two Financial Gym clients who have both had their federal loans forgiven. They join me to share how they did it, the process, and why you should apply even if you’re not sure it’s time for you.
What are we drinking?
Danielle - Ice cold water
Katie - Nuun Water
Shannon - Black Cherry Schweppes
Podcast Notes
Danielle’s Story
Danielle learned about the Public Service Loan Forgiveness (PSLF) program in grad school. With $100k in debt, she figured this program would be her saving grace.
After school, with an undergraduate degree in psychology and a master’s in social work, she immediately started working for employers who met the requirements of the PSLF program.
The beginning was the most daunting part because 120 payments felt like a long time, but she trusted the process and continued to certify her employment each year. Her goal was to pay the least amount possible, and trust forgiveness would come through as long as she stayed organized.
There were changes to the program when COVID-19 legislation was passed, which increased her payment count. When she noticed the shift in payment count, she started making calls to figure out where she stood.
Around May, she got the paperwork ready, sent it to HR, and submitted the final application a week later once everything was ready.
Having her loans forgiven was exciting, but the process was a little anticlimactic. She has yet to receive a notification or letter. She kept waiting and checked the website one day to see the balance was $0.
Since there was no letter, she called to ask! On the call, they confirmed the forgiveness had been processed, and it felt surreal. $100k of student loan debt had been forgiven. She called her husband to celebrate!
Katie’s Story
Katie was in her twelfth year as a teacher working in New York when her mom’s friend encouraged her to check out the PSLF program. She didn’t think she qualified at first and was hesitant to look into it, but with a bit of encouragement, she decided to try.
She got in touch with Nelnet, her loan provider, and talked through the application requirements. She started to get organized, scanned through her payments, and contacted former employers to get the needed signatures.
She worked closely with Nelnet, who helped her complete the final application. She wasn’t sure if she qualified, but the person on the phone told her to send in the application and let the government figure it out.
She sent in the application via certified mail and, in April, got a welcome email from Molela and another one shortly after, saying her application was in review. On May 10, she got a letter from Mohela saying a message was on her account. The message was the confirmation of loan forgiveness for around $59k.
As with most government programs, the communication isn’t great, but things are moving behind the scenes.
Tips for Pursuing Public Service Loan Forgiveness
If you’re unsure if you qualify, now is the time to check. What counts as a qualifying employer is a pretty wide range, and the recent changes to the program have made more people eligible than ever. It doesn’t hurt to check.
Applying for student loan forgiveness can take time and work, but having your loans forgiven is absolutely worth it. Use the tools available through studentaid.gov and your loan provider to see what options are available to you.
The biggest hurdle is getting initially organized. This can take time if you have to approach former employers for signatures, but it is worth it. Once you’re caught up, certifying each year is relatively simple.
All of the $0 payments made during Covid count towards the required payments for forgiveness, which means you may be closer than you think. Student loan forgiveness is real, and it’s happening. Now is the time to get on track.
If you achieve forgiveness through this program, there is no reason to feel guilty. People should not have to go into debt to work as public servants and be limited by opportunities. This work is important, and you deserve forgiveness.
There is a lot of information out there, which can be confusing. If you have questions or need clarification, call your provider. They can clarify information, answer your questions, and tell you exactly what steps to take.
Takeaway: My biggest takeaway is that college is expensive and rather than be strapped with burdensome student loan debt for 20+ years, maybe looking into a career that could get you the forgiveness in 10 years is a better strategy.
Random Three Questions
What’s the next big goal?
What is something you’re currently binging?
If this was your last meal on earth, what would it be?
Resources:
If you have any topics you would like me to cover on this podcast, or if you’d like to get in the financially naked hot seat, I encourage you to email me at Shannon@fingyms.com, or join the private Martinis and Your Money Facebook Page, and let me know what you want to hear.
In addition to hosting this show, I’m the founder and CEO of The Financial Gym. We are celebrating 10 years of this journey, and now, more than ever, I see the importance of the work we do every day. Rising inflation, the return of student loan debt, high interest rates on mortgages, and volatile stock markets make it a time when you need a best financial friend to help you make the best choices.
At Financial Gym, you get paired with a Certified Financial Trainer, who we call your BFF. Our team has coached clients through every financial season, whether they were living paycheck to paycheck or headed into Financial Independence and retirement.
To celebrate the final season of Martinis and Your Money, listeners can get 20% off of one-on-one training services. So what are you waiting for? Head over to financialgym.com to get started today. Our warm-up calls are free of cost and judgment.