It’s been everywhere in the news this week, <1% of applications for Public Service Loan Forgiveness (PSLF) have resulted in discharged loans. That number is shockingly low.
If you’re counting on PSLF and feeling terrified at the low approval rate read on to find out what happened based on the data the Dept of Ed released.
Estimated read time ~ 5 min. Estimated watch time at 1.5x ~3 minutes.
The Stats
Check out this Federal Student Aid PSLF Report
- 28,081 unique borrowers submitted applications for PSLF
- 96 borrowers (0.3%) have had their student loan discharged
- The average value of the discharged student loan debt is $57,500
- 289 borrowers (~1%) have had their applications approved
- ~8,000 applications (~29%) were denied due to missing information
- ~ 20,000 applications (~71%) denied due to not meeting program requirements
These numbers might look a little odd because they’re adding up to more than 100% and the news talks about more than 30,000 while I’m only talking about 28,000. That’s because while there are over 32,000 applications, there are only 28,081 unique borrowers. That’s the number I think matters when we’re talking about denying loan forgiveness. The number of unique lives that are going to be affected, not the number of pieces of paper that get rejected.
71% of applicants didn’t meet program requirements
Not meeting program requirements is likely a nail in the coffin for borrowers hoping to get PSLF. It could mean that the borrower doesn’t have the right loan type (only Direct Loans qualify), or that they’re not working for the right type of employer. In either of these scenarios the borrower isn’t where they think they are and it’s a true denial of forgiveness.
29% of applicants were missing information
This situation might be a little less nefarious for borrowers. It could mean that they’re missing employment information or missing documentation of some sort. This is a potentially fixable problem that might simply take a few months and a second try but doesn’t rule borrowers out of PSLF completely.
1% of applicants have their applications approved
These folks are likely just waiting for their student loans to be discharged at the time the report was made (June 30th, 2018). That means this 1% should be getting their student loans discharged soon.
0.3% of applicants are free
These guys prove that PSLF is possible, though rare right now. These borrowers completed all the necessary paperwork, jumped through all the hoops, interpreted PSLF correctly, not to mention made payments while working for 10 years in qualifying employment and were rewarded with forgiveness.
Whats a borrower to do?
PSLF is very obviously a tricky beast as demonstrated by the statistics above. But it’s not impossible to tackle. I suggest reading up on PSLF on the FSA website. You can also check out a few articles I linked below.
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