7 ms·

Education Dept. rejects most applicants for student loan forgiveness program

102 points by ilamont 8y ago

Alupis 8y ago
FTA: In response to an inquiry from Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of Dec. 28 under the new program. Most of those, 28,640 people, were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program. Of the 9,820 applicants who cleared the first hurdle, 1,184 are still under consideration. The rest were rejected for myriad reasons. Of the applicants who cleared the initial hurdle, 40% still had years to go before hitting the required 10-year mark. Nearly a quarter were ineligible because they were paying less money in the wrong payment plan than they would have in the correct one. Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program. Some had not made enough on-time payments or had not had at least 10 years of full-time employment certified by a qualifying employer, according to the department. I really don't see the problem here. People aren't qualifying for the program (many in obvious ways, such as not meeting the 10 year minimum, or making on-time payments), and I'm supposed to (from the article's clear intent) feel outraged by this?
- mgadams3 8y ago
  I can see your point. But it does sound like a SaaS product that deliberately makes it hard to cancel but legally doesn't have to stop charging your card.
  - Alupis 8y ago
    No, not really. It clearly says you need to have had the loan for 10 years and been paying on time payments and have a stable job. Those requirements don't seem absurd, outlandish, nor designed to make people fail. If you don't meet those minimum of requirements, why would the tax payer want to forgive your debts - you clearly didn't hold your end of the bargain, yet want to be released of potentially thousands or tens of thousands of dollars of public-money debt.
    - nmcfarl 8y ago
      I think you might feel differently if you'd actually read the documentation as it existed 8 years ago (I've not looked at this in years). Or talked with customer support agents for the program that who told my wife that a formal loan forgiveness application was not required, and would be a waste of time. Just meet the criteria and apply when your 10 years were up. But what those criteria were was not described clearly enough to make 10 year plans on. And the general confusion was so massive, the program so obviously a shambles, that we decided there was little chance that the program would survive, and passed on it.
      - Alupis 8y ago
        Sorry to hear that. The point still stands, however. For a program as controversial as this (loan forgiveness in general, that is), it's amazing there's any program at all. Those wishing to be granted forgiveness have a clear list of requirements they need to meet in order to be considered - yet the article wants me to be outraged at the current administration because so few people that applied bothered to even read the requirements.
        germinalphrase 8y ago
        I think the point is that requirements are/were explicitly unclear and that otherwise minor deviations (like a payment being received on Monday rather than Friday) are used as justifications to make people - who have made financial and career sacrifices based on the expectation of loan forgiveness - ineligible.
    - mcguire 8y ago
      If you have had the loan for 10 years, have a stable job, and have been making payments...why do you need the loan forgiven?
      - ihattendorf 8y ago
        It's used to incentivize public service jobs. Someone with $100k+ in loans can take a lower paying local government job instead of having to work elsewhere to pay off the loans.
- stickfigure 8y ago
  I believe the concept of this program is to act as an incentive for (former) students to go into public service. If nobody can use it because of kafka-esque procedures, then the program isn't serving its goal.
  - EpicEng 8y ago
    Did you borrow a large sun of money from said SaaS company? Kind of changes things, no?
  - jessewmc 8y ago
    Why not use this money to pay public servants more?
    - fzeroracer 8y ago
      Wouldn't this depend on how much debt a person is in? If you gave someone a raise but they were still deep in debt, the raise wouldn't be enough to cover the growing costs of having a large loan loom over your finances. In this case it would be more effective to pay off the loan if you value said worker keeping more of their money. Plus not all public servants are facing debt, which means that the people with debt are going to gain less benefit from an overall raise.
    - rhizome 8y ago
      This is asking a lot of a random commenter on HN.
- garmaine 8y ago
  The issue is that many of those requirements weren't in the law authorizing this program.
  - repiret 8y ago
    Do you have a good reference showing which restrictions came from Congress and which ones the Education Department is adding on? And whether those added restrictions come from some discretion that Congress authorized, or are simply illegal?
    - garmaine 8y ago
      It's the lead-in to the article.
- pimlottc 8y ago
  Please don’t quote that way, it’s very hard to read on mobile.
  - nobodyforum12 8y ago
    Even if you have a point, your comment is off-putting and it sounds like you're demanding someone cater to your specific use case. Maybe offer a better solution if you want your comment to be constructive rather than whiny. EDIT: I also just checked this comment in the iOS app as well as a mobile browser and it looked completely fine. So, again, offer up a solution or provide details of your device so others can inform on how to fix this.
    - Chris_Chambers 8y ago
      Your autism is off the charts. You should not have created an account to post this.
    - pimlottc 8y ago
      One alternative is to simply italicize the quote: In response to an inquiry from Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of Dec. 28 under the new program. Most of those, 28,640 people, were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program. Of the 9,820 applicants who cleared the first hurdle, 1,184 are still under consideration. The rest were rejected for myriad reasons. Of the applicants who cleared the initial hurdle, 40% still had years to go before hitting the required 10-year mark. Nearly a quarter were ineligible because they were paying less money in the wrong payment plan than they would have in the correct one. Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program. Some had not made enough on-time payments or had not had at least 10 years of full-time employment certified by a qualifying employer, according to the department. I would have done this myself but I was on mobile at the time. As for devices, the fixed width quoting requires horizontal scrolling on both the iPhone SE and iPhone 6.
  - 8y ago
- sosodev 8y ago
  People aren't qualifying because, as the article points out, the requirements for the program are absurd. It's really apparent when you look at how little student debt has been forgiven compared to the amount allocated for the program.
  - rayiner 8y ago
    What requirements are “absurd?”
    - germinalphrase 8y ago
      For one, it’s been reported that a single late payment by a day kicks you out of eligibility. The requirements are designed with the intention that people will fail.
      - rayiner 8y ago
        No the program requires 120 on time monthly payments, but those do not need to be consecutive. That’s always been the rule.
    - jhfdbkofdcho 8y ago
      One example is that They told people 10 years ago that the job they were working qualified and they got letters each year saying all good and then changed their mind about the job qualifying. So now these people are screwed.
      - civilian 8y ago
        Can you back that with a citation? I'm reading this form and it seems pretty straightforward who a qualifying employer is. https://studentaid.ed.gov/sa/sites/default/files/public-service-application-for-forgiveness.pdf https://studentaid.ed.gov/sa/sites/default/files/public-serv... > A Qualifying employer includes the government, a notfor-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or a private not-forprofit organization that provides certain public services. and it goes on to give definitions of "government" and "not for profit" orgs.
- civilian 8y ago
  It seemed strange that there's a "request for forgiveness" and an "application for forgiveness". But hey, having to fill out two forms seems like pretty typical government work. Here's the form. It pretty straightforwardly specifies 120 on-time payments to school loans. https://studentaid.ed.gov/sa/sites/default/files/public-service-application-for-forgiveness.pdf https://studentaid.ed.gov/sa/sites/default/files/public-serv... I wonder where all these people are coming from, that are just misapplying for student loan forgiveness.
  - droithomme 8y ago
    That form is useful information. It states: > Neither the 120 qualifying payments nor employment have to be consecutive. Do you know if any of the tens of thousands rejected were rejected because they made a single late payment as some are claiming? The text on the form does not make that a disqualifier. It would seem to be important to clarify whether the form is incorrect as pertains to the law, or if none of the claims made are true that a single, or even a sequence of, late payments scuttled eligibility for someone.
    - zaroth 8y ago
      Thank you for quoting the form. It’s 120 full on-time payments completed in no less than 10 years. You can miss payments. But your loan must not be in default. Yes, the many people claiming that a single missed payment will disqualify you are factually incorrect.
- xwvvvvwx 8y ago
  The lenders take huge profits as interest, supposedly as payment for the risk that they are taking on. It's an outrage because if so few people are able to default on the loans, the lenders are not taking on any risk at all, and are in fact functioning more as a kind of mafia style protection racket.
rayiner 8y ago
I started law school shortly after the PSLF program was created. The program created a loan forgiveness option after 10 years of qualifying public service. The criteria for qualification are clearly specified up front. Among other things, you need to make 120 monthly payments on a qualifying income-driven repayment plan. None of these criteria are arbitrary or hard to understand. Nonetheless, because so many people couldn't figure it out, Congress allocated an additional $700 million to help those folks. But, as far as I can tell from the article, the people being denied are the ones who still can't figure it out. 28,640 of the 38,640 had not previously applied for loan forgiveness. Of course those people must be rejected--this $700 million is a supplemental program for people who goofed up and got rejected from the regular PSLF. It would make no sense to let people get money from that program before they were rejected from regular PSLF. The other reasons for rejection are even more meritorious. If you haven't been paying for 10 years, or were paying less on your incorrect plan than you would have under the PSLF plan, you shouldn't get loan forgiveness--you haven't paid in what you were supposed to. Likewise, the federal government cannot do anything about private student loans. It goes without saying that people who don't have 10 years in a qualifying public-service job shouldn't get forgiveness. Literally every reason mentioned in the article for rejecting these applications are good reasons for rejecting these applications.
- viivaux 8y ago
  You blame the students for a program which was designed to give away 700 million, but instead gave away a 70th of that - while rejecting 97-99% of applicants so far? This at a time when at least 1.5 trillion of tax cuts for the wealthy have been given (about 140,000 times more money than what was actually paid, or "only" 2,000 times more than what was supposed to go). Staggering. What kind of mindset allows for this?
- jey 8y ago
  The "regular PSLF" mentioned above is: https://en.wikipedia.org/wiki/Public_Service_Loan_Forgiveness_(PSLF) https://en.wikipedia.org/wiki/Public_Service_Loan_Forgivenes... The "supplemental PSLF" is: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service/temporary-expanded-public-service-loan-forgiveness https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell...
microcolonel 8y ago
Yes, if you have a good reason to reject a loan forgiveness application, you should reject it. I don't even agree with the concept of outright forgiveness of a loan without collateral without some genuine settlement; but surely a program like this needs some standards even if you don't disagree with the basic concept.
jtchang 8y ago
It comes down to what the goal was of the program. Was it to issue $700MM and incentivize people to go into public service? If so then it really did fail if they only managed to dole out $10MM or so. I would think the end goal would be that the program could say "Hey you gave us $700 MM and we managed to get all these public servants in it and on track".
droithomme 8y ago
Article is clear. $700 million funding for this secondary phase program. Only 262 applicants had success; 38,198 no success. So program costs 2.67 million per successful applicant. With loans between a few thousand and a quarter million dollars. Let's say $40,000 on average, which is 10.5 million for all of them spent, and the remaining $690 million is thus the administrative overhead. People OK with this seem to believe the $690 million in administrative overhead is money well spent and the $10.5 million spent on actual loan payouts is nearly an extravagance. Interesting.
- dragonwriter 8y ago
  There's a not-insignificant school of thought in American politics that it is vastly more important to prevent people from getting benefits who are not ideal recipients than it is to make sure people who should get benefits do. This spending ratio is in line with those priorities.
  - lamarpye 8y ago
    I'll bet you went to the same school as the OP.
- rayiner 8y ago
  Where on earth did you get that? $700 million is a pot of money available to help out those who didn’t properly qualify for the PSLF program. The rejected a bunch of applications (surprise, people who couldn’t figure out the instructions the first time couldn’t figure them out the second time). Nothing in the article suggests they spent the rest of the money.
- coryrc 8y ago
  The money wasn't spent. It's staying to pay down public debt instead of private debt.
- duxup 8y ago
  I don't think that because the money isn't used that means that it all goes to "administration".
olliej 8y ago
well yes, because loan forgiveness is only for corporations.
- deepakhj 8y ago
  Money for GM is ok but not for increasing the quality of public teachers.
reagan83 8y ago
It took 8 requests from our end to get approval for my wife. We were rejected for the most ridiculous reasons on a 10 field form.
- lawnchair_larry 8y ago
  Rayiner has asserted with authority that you can’t possibly end up in that situation if you and your wife have even basic reading comprehension skills once, let alone 7 times. Can you provide examples of these ridiculous reasons so we can either conclude that the two of you are indeed invalids, or so he can re-evaluate his assumptions and perhaps stop denigrating folks like yourself?
  - scythe 8y ago
    Please don't be so confrontational. This forum depends on constructive engagement to be useful.
    - djakjxnanjak 8y ago
      He could have put it in a nicer way, but I do think it did a good job explaining how a particular chunk of anecdotal information could be very helpful to the conversation. Many of the above comments about how these people deserve to be rejected also come off as pretty unkind.
    - lawnchair_larry 8y ago
      Are you kidding? That’s what passes for confrontational now? You kids, I tell ya ;) It was very slightly snarky perhaps, but appropriate to make a point. Maybe it’s better to hold off on the assumptions that everyone else must just be idiots. I’m fine with someone deciding that they are indeed idiots, but at least ask some questions and get their side first before declaring them so to the whole internet. Shit is rarely as simple as it might seem to an outsider. I doubt anyone who can manage to register for HN could fuck up the forgiveness application 7 times if the process was truly as simple as claimed.
- garenp 8y ago
exabrial 8y ago
I'm a little unclear why this is the taxpayer's burden to carry.
- sosodev 8y ago
  Should public workers be in debt for the rest of their life or should they be uneducated?
  - exabrial 8y ago
    Neither? That's a false dichotomy.
    - sosodev 8y ago
      Right, the correct answer is neither. So who's going to foot the bill for their education? They're already working for the public benefit so...
      - justtopost 8y ago
        They take home a paycheck, they get to pay their debts like anyone else.
        stickfigure 8y ago
        This acts as an "employment benefit" for the government, like health insurance, paid vacation, and free lunch. Whether or not it's better than just paying people more is debatable - but you can say the same things about health insurance, paid vacation, and free lunch. It's a little more complicated than employer-sponsored lunch because it applies to a variety of employers, not just the US government. And it targets a particular demographic (recent college graduates). But fundamentally it's (supposed to be) one more thing that humans factor into the decision of what sort of career to take. There are reasonable arguments for and against the program, but soundbites like "they get to pay their debts like anyone else" do not really add to the conversation constructively.
samsa 8y ago
It's worth noting that there aren't many people who SHOULD be eligible for PSLF yet. This Forbes piece does the math: https://www.forbes.com/sites/robertfarrington/2019/01/22/why-the-public-service-loan-forgiveness-headlines-are-misleading/ https://www.forbes.com/sites/robertfarrington/2019/01/22/why... I say this as someone who has a lot of money on the line; I have been in an income based repayment plan for about nine years, work for a local government, have a Direct Loan, etc., etc. We'll see how the program still stands when I'm actually eligible to apply in October 2020...
scythe 8y ago
There are some interesting case studies of these weird denials provided by 'jhfdbkofdcho below: https://www.americanbar.org/news/abanews/aba-news-archives/2019/02/judge-overturns-changes-to-student-loan-forgiveness-program-by-e/ https://www.americanbar.org/news/abanews/aba-news-archives/2... >In a 54-page opinion, U.S. District Judge Timothy J. Kelly said changes to the eligibility requirements, made several years after the program began, were “arbitrary and capricious.” Kelly called one of the Education Department’s main arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument. >Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules. https://www.cnbc.com/2018/12/18/borrowers-denied-public-service-loan-forgiveness-file-lawsuits.html https://www.cnbc.com/2018/12/18/borrowers-denied-public-serv... >Here’s another example but it’s about being in the wrong loan program or repayment plan. But the fact pattern is similar. The servicers and the dept of Ed did a bad job implementing this program. >“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness. "They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”
akudha 8y ago
The fact that there is a need for such a program in the first place makes me uncomfortable. How bad has the student debt gotten to warrant such programs?
- xemdetia 8y ago
  I don't blame student debt wholly for this, the second factor is that public sector jobs are somewhere between 1/2 to 2/3 of a private sector salary. There is also general hostility to match private sector salary with public funds (for many reasons) and the math just doesn't line up. This forgiveness program makes sense for some of the silliness of government funding and budget allocation but it doesn't make common sense. It also makes sense if salary is lower that you get some benefit for the fact you can't pay down loans aggressively to minimize the impact of interest. I would also indicate that I feel like it's disingenuous to compare forgiveness programs of bachelors education compared to specialists like lawyers and PhD types where even state schools put you in the 80k+ club.
- poilcn 8y ago
  It could be other way around. Such programs encourage making education/healthcare prices absurdly high as they guarantee the return without any responsibility from the colleges/hospitals/banks/loaners, etc.
dorchadas 8y ago
If I needed any more of a sign to get out of public education, this is it.
- mjcohen 8y ago
  No. This is more evidence that the Trump administration wants to destroy public education so that more money can be made by things like De Vos.
  - justtopost 8y ago
    Pointlessly politisizing an issue says more about you than them.
  - gnicholas 8y ago
    Public education? This program probably screwed towards students in private universities, if anything. Higher tuition would mean more students have loans, and larger loans.
RickJWagner 8y ago
A shocking example of the federal government actually doing good work. The article explains the reasons for the rejections. It's pretty clear that rules were established and are being followed.
UncleEntity 8y ago
Huh, isn't at all like the stop-loss payment program they had for military personnel. They sent a bunch of letters which I ignored because (I thought) I didn't qualify until the last one with "Final Notice" so I figured why not? A while later they sent me a check for something like $2,600 -- they were literally begging me to take their money.
cockatoo2 8y ago
Trump working for the people. Nothing to see here. That 150 million is badly needed for his Mar a Lago golfing
musicale 8y ago
This program seems to be poorly structured - the loan forgiveness schedule should not be 0% for 10 years and then suddenly 100%.

102 points by ilamont 8y ago

FTA: In response to an inquiry from Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of Dec. 28 under the new program. Most of those, 28,640 people, were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program. Of the 9,820 applicants who cleared the first hurdle, 1,184 are still under consideration. The rest were rejected for myriad reasons. Of the applicants who cleared the initial hurdle, 40% still had years to go before hitting the required 10-year mark. Nearly a quarter were ineligible because they were paying less money in the wrong payment plan than they would have in the correct one. Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program. Some had not made enough on-time payments or had not had at least 10 years of full-time employment certified by a qualifying employer, according to the department. I really don't see the problem here. People aren't qualifying for the program (many in obvious ways, such as not meeting the 10 year minimum, or making on-time payments), and I'm supposed to (from the article's clear intent) feel outraged by this?

mgadams3 8y ago
I can see your point. But it does sound like a SaaS product that deliberately makes it hard to cancel but legally doesn't have to stop charging your card.
- Alupis 8y ago
  No, not really. It clearly says you need to have had the loan for 10 years and been paying on time payments and have a stable job. Those requirements don't seem absurd, outlandish, nor designed to make people fail. If you don't meet those minimum of requirements, why would the tax payer want to forgive your debts - you clearly didn't hold your end of the bargain, yet want to be released of potentially thousands or tens of thousands of dollars of public-money debt.
  - nmcfarl 8y ago
    I think you might feel differently if you'd actually read the documentation as it existed 8 years ago (I've not looked at this in years). Or talked with customer support agents for the program that who told my wife that a formal loan forgiveness application was not required, and would be a waste of time. Just meet the criteria and apply when your 10 years were up. But what those criteria were was not described clearly enough to make 10 year plans on. And the general confusion was so massive, the program so obviously a shambles, that we decided there was little chance that the program would survive, and passed on it.
    - Alupis 8y ago
      Sorry to hear that. The point still stands, however. For a program as controversial as this (loan forgiveness in general, that is), it's amazing there's any program at all. Those wishing to be granted forgiveness have a clear list of requirements they need to meet in order to be considered - yet the article wants me to be outraged at the current administration because so few people that applied bothered to even read the requirements.
      - germinalphrase 8y ago
        I think the point is that requirements are/were explicitly unclear and that otherwise minor deviations (like a payment being received on Monday rather than Friday) are used as justifications to make people - who have made financial and career sacrifices based on the expectation of loan forgiveness - ineligible.
  - mcguire 8y ago
    If you have had the loan for 10 years, have a stable job, and have been making payments...why do you need the loan forgiven?
    - ihattendorf 8y ago
      It's used to incentivize public service jobs. Someone with $100k+ in loans can take a lower paying local government job instead of having to work elsewhere to pay off the loans.
stickfigure 8y ago
I believe the concept of this program is to act as an incentive for (former) students to go into public service. If nobody can use it because of kafka-esque procedures, then the program isn't serving its goal.
- EpicEng 8y ago
  Did you borrow a large sun of money from said SaaS company? Kind of changes things, no?
- jessewmc 8y ago
  Why not use this money to pay public servants more?
  - fzeroracer 8y ago
    Wouldn't this depend on how much debt a person is in? If you gave someone a raise but they were still deep in debt, the raise wouldn't be enough to cover the growing costs of having a large loan loom over your finances. In this case it would be more effective to pay off the loan if you value said worker keeping more of their money. Plus not all public servants are facing debt, which means that the people with debt are going to gain less benefit from an overall raise.
  - rhizome 8y ago
    This is asking a lot of a random commenter on HN.
garmaine 8y ago
The issue is that many of those requirements weren't in the law authorizing this program.
- repiret 8y ago
  Do you have a good reference showing which restrictions came from Congress and which ones the Education Department is adding on? And whether those added restrictions come from some discretion that Congress authorized, or are simply illegal?
  - garmaine 8y ago
    It's the lead-in to the article.
pimlottc 8y ago
Please don’t quote that way, it’s very hard to read on mobile.
- nobodyforum12 8y ago
  Even if you have a point, your comment is off-putting and it sounds like you're demanding someone cater to your specific use case. Maybe offer a better solution if you want your comment to be constructive rather than whiny. EDIT: I also just checked this comment in the iOS app as well as a mobile browser and it looked completely fine. So, again, offer up a solution or provide details of your device so others can inform on how to fix this.
  - Chris_Chambers 8y ago
    Your autism is off the charts. You should not have created an account to post this.
  - pimlottc 8y ago
    One alternative is to simply italicize the quote: In response to an inquiry from Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of Dec. 28 under the new program. Most of those, 28,640 people, were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program. Of the 9,820 applicants who cleared the first hurdle, 1,184 are still under consideration. The rest were rejected for myriad reasons. Of the applicants who cleared the initial hurdle, 40% still had years to go before hitting the required 10-year mark. Nearly a quarter were ineligible because they were paying less money in the wrong payment plan than they would have in the correct one. Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program. Some had not made enough on-time payments or had not had at least 10 years of full-time employment certified by a qualifying employer, according to the department. I would have done this myself but I was on mobile at the time. As for devices, the fixed width quoting requires horizontal scrolling on both the iPhone SE and iPhone 6.
- 8y ago
sosodev 8y ago
People aren't qualifying because, as the article points out, the requirements for the program are absurd. It's really apparent when you look at how little student debt has been forgiven compared to the amount allocated for the program.
- rayiner 8y ago
  What requirements are “absurd?”
  - germinalphrase 8y ago
    For one, it’s been reported that a single late payment by a day kicks you out of eligibility. The requirements are designed with the intention that people will fail.
    - rayiner 8y ago
      No the program requires 120 on time monthly payments, but those do not need to be consecutive. That’s always been the rule.
  - jhfdbkofdcho 8y ago
    One example is that They told people 10 years ago that the job they were working qualified and they got letters each year saying all good and then changed their mind about the job qualifying. So now these people are screwed.
    - civilian 8y ago
      Can you back that with a citation? I'm reading this form and it seems pretty straightforward who a qualifying employer is. https://studentaid.ed.gov/sa/sites/default/files/public-service-application-for-forgiveness.pdf https://studentaid.ed.gov/sa/sites/default/files/public-serv... > A Qualifying employer includes the government, a notfor-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or a private not-forprofit organization that provides certain public services. and it goes on to give definitions of "government" and "not for profit" orgs.
civilian 8y ago
It seemed strange that there's a "request for forgiveness" and an "application for forgiveness". But hey, having to fill out two forms seems like pretty typical government work. Here's the form. It pretty straightforwardly specifies 120 on-time payments to school loans. https://studentaid.ed.gov/sa/sites/default/files/public-service-application-for-forgiveness.pdf https://studentaid.ed.gov/sa/sites/default/files/public-serv... I wonder where all these people are coming from, that are just misapplying for student loan forgiveness.
- droithomme 8y ago
  That form is useful information. It states: > Neither the 120 qualifying payments nor employment have to be consecutive. Do you know if any of the tens of thousands rejected were rejected because they made a single late payment as some are claiming? The text on the form does not make that a disqualifier. It would seem to be important to clarify whether the form is incorrect as pertains to the law, or if none of the claims made are true that a single, or even a sequence of, late payments scuttled eligibility for someone.
  - zaroth 8y ago
    Thank you for quoting the form. It’s 120 full on-time payments completed in no less than 10 years. You can miss payments. But your loan must not be in default. Yes, the many people claiming that a single missed payment will disqualify you are factually incorrect.
xwvvvvwx 8y ago
The lenders take huge profits as interest, supposedly as payment for the risk that they are taking on. It's an outrage because if so few people are able to default on the loans, the lenders are not taking on any risk at all, and are in fact functioning more as a kind of mafia style protection racket.

rayiner 8y ago

I started law school shortly after the PSLF program was created. The program created a loan forgiveness option after 10 years of qualifying public service. The criteria for qualification are clearly specified up front. Among other things, you need to make 120 monthly payments on a qualifying income-driven repayment plan. None of these criteria are arbitrary or hard to understand. Nonetheless, because so many people couldn't figure it out, Congress allocated an additional $700 million to help those folks. But, as far as I can tell from the article, the people being denied are the ones who still can't figure it out. 28,640 of the 38,640 had not previously applied for loan forgiveness. Of course those people must be rejected--this $700 million is a supplemental program for people who goofed up and got rejected from the regular PSLF. It would make no sense to let people get money from that program before they were rejected from regular PSLF. The other reasons for rejection are even more meritorious. If you haven't been paying for 10 years, or were paying less on your incorrect plan than you would have under the PSLF plan, you shouldn't get loan forgiveness--you haven't paid in what you were supposed to. Likewise, the federal government cannot do anything about private student loans. It goes without saying that people who don't have 10 years in a qualifying public-service job shouldn't get forgiveness. Literally every reason mentioned in the article for rejecting these applications are good reasons for rejecting these applications.

viivaux 8y ago
You blame the students for a program which was designed to give away 700 million, but instead gave away a 70th of that - while rejecting 97-99% of applicants so far? This at a time when at least 1.5 trillion of tax cuts for the wealthy have been given (about 140,000 times more money than what was actually paid, or "only" 2,000 times more than what was supposed to go). Staggering. What kind of mindset allows for this?
jey 8y ago
The "regular PSLF" mentioned above is: https://en.wikipedia.org/wiki/Public_Service_Loan_Forgiveness_(PSLF) https://en.wikipedia.org/wiki/Public_Service_Loan_Forgivenes... The "supplemental PSLF" is: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service/temporary-expanded-public-service-loan-forgiveness https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell...

microcolonel 8y ago

Yes, if you have a good reason to reject a loan forgiveness application, you should reject it. I don't even agree with the concept of outright forgiveness of a loan without collateral without some genuine settlement; but surely a program like this needs some standards even if you don't disagree with the basic concept.

jtchang 8y ago

It comes down to what the goal was of the program. Was it to issue $700MM and incentivize people to go into public service? If so then it really did fail if they only managed to dole out $10MM or so. I would think the end goal would be that the program could say "Hey you gave us $700 MM and we managed to get all these public servants in it and on track".

droithomme 8y ago

Article is clear. $700 million funding for this secondary phase program. Only 262 applicants had success; 38,198 no success. So program costs 2.67 million per successful applicant. With loans between a few thousand and a quarter million dollars. Let's say $40,000 on average, which is 10.5 million for all of them spent, and the remaining $690 million is thus the administrative overhead. People OK with this seem to believe the $690 million in administrative overhead is money well spent and the $10.5 million spent on actual loan payouts is nearly an extravagance. Interesting.

dragonwriter 8y ago
There's a not-insignificant school of thought in American politics that it is vastly more important to prevent people from getting benefits who are not ideal recipients than it is to make sure people who should get benefits do. This spending ratio is in line with those priorities.
- lamarpye 8y ago
  I'll bet you went to the same school as the OP.
rayiner 8y ago
Where on earth did you get that? $700 million is a pot of money available to help out those who didn’t properly qualify for the PSLF program. The rejected a bunch of applications (surprise, people who couldn’t figure out the instructions the first time couldn’t figure them out the second time). Nothing in the article suggests they spent the rest of the money.
coryrc 8y ago
The money wasn't spent. It's staying to pay down public debt instead of private debt.
duxup 8y ago
I don't think that because the money isn't used that means that it all goes to "administration".

olliej 8y ago

well yes, because loan forgiveness is only for corporations.

deepakhj 8y ago
Money for GM is ok but not for increasing the quality of public teachers.

reagan83 8y ago

It took 8 requests from our end to get approval for my wife. We were rejected for the most ridiculous reasons on a 10 field form.

lawnchair_larry 8y ago
Rayiner has asserted with authority that you can’t possibly end up in that situation if you and your wife have even basic reading comprehension skills once, let alone 7 times. Can you provide examples of these ridiculous reasons so we can either conclude that the two of you are indeed invalids, or so he can re-evaluate his assumptions and perhaps stop denigrating folks like yourself?
- scythe 8y ago
  Please don't be so confrontational. This forum depends on constructive engagement to be useful.
  - djakjxnanjak 8y ago
    He could have put it in a nicer way, but I do think it did a good job explaining how a particular chunk of anecdotal information could be very helpful to the conversation. Many of the above comments about how these people deserve to be rejected also come off as pretty unkind.
  - lawnchair_larry 8y ago
    Are you kidding? That’s what passes for confrontational now? You kids, I tell ya ;) It was very slightly snarky perhaps, but appropriate to make a point. Maybe it’s better to hold off on the assumptions that everyone else must just be idiots. I’m fine with someone deciding that they are indeed idiots, but at least ask some questions and get their side first before declaring them so to the whole internet. Shit is rarely as simple as it might seem to an outsider. I doubt anyone who can manage to register for HN could fuck up the forgiveness application 7 times if the process was truly as simple as claimed.
garenp 8y ago

exabrial 8y ago

I'm a little unclear why this is the taxpayer's burden to carry.

sosodev 8y ago
Should public workers be in debt for the rest of their life or should they be uneducated?
- exabrial 8y ago
  Neither? That's a false dichotomy.
  - sosodev 8y ago
    Right, the correct answer is neither. So who's going to foot the bill for their education? They're already working for the public benefit so...
    - justtopost 8y ago
      They take home a paycheck, they get to pay their debts like anyone else.
      - stickfigure 8y ago
        This acts as an "employment benefit" for the government, like health insurance, paid vacation, and free lunch. Whether or not it's better than just paying people more is debatable - but you can say the same things about health insurance, paid vacation, and free lunch. It's a little more complicated than employer-sponsored lunch because it applies to a variety of employers, not just the US government. And it targets a particular demographic (recent college graduates). But fundamentally it's (supposed to be) one more thing that humans factor into the decision of what sort of career to take. There are reasonable arguments for and against the program, but soundbites like "they get to pay their debts like anyone else" do not really add to the conversation constructively.

samsa 8y ago

It's worth noting that there aren't many people who SHOULD be eligible for PSLF yet. This Forbes piece does the math: https://www.forbes.com/sites/robertfarrington/2019/01/22/why-the-public-service-loan-forgiveness-headlines-are-misleading/ https://www.forbes.com/sites/robertfarrington/2019/01/22/why... I say this as someone who has a lot of money on the line; I have been in an income based repayment plan for about nine years, work for a local government, have a Direct Loan, etc., etc. We'll see how the program still stands when I'm actually eligible to apply in October 2020...

scythe 8y ago

There are some interesting case studies of these weird denials provided by 'jhfdbkofdcho below: https://www.americanbar.org/news/abanews/aba-news-archives/2019/02/judge-overturns-changes-to-student-loan-forgiveness-program-by-e/ https://www.americanbar.org/news/abanews/aba-news-archives/2... >In a 54-page opinion, U.S. District Judge Timothy J. Kelly said changes to the eligibility requirements, made several years after the program began, were “arbitrary and capricious.” Kelly called one of the Education Department’s main arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument. >Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules. https://www.cnbc.com/2018/12/18/borrowers-denied-public-service-loan-forgiveness-file-lawsuits.html https://www.cnbc.com/2018/12/18/borrowers-denied-public-serv... >Here’s another example but it’s about being in the wrong loan program or repayment plan. But the fact pattern is similar. The servicers and the dept of Ed did a bad job implementing this program. >“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness. "They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”

akudha 8y ago

The fact that there is a need for such a program in the first place makes me uncomfortable. How bad has the student debt gotten to warrant such programs?

xemdetia 8y ago
I don't blame student debt wholly for this, the second factor is that public sector jobs are somewhere between 1/2 to 2/3 of a private sector salary. There is also general hostility to match private sector salary with public funds (for many reasons) and the math just doesn't line up. This forgiveness program makes sense for some of the silliness of government funding and budget allocation but it doesn't make common sense. It also makes sense if salary is lower that you get some benefit for the fact you can't pay down loans aggressively to minimize the impact of interest. I would also indicate that I feel like it's disingenuous to compare forgiveness programs of bachelors education compared to specialists like lawyers and PhD types where even state schools put you in the 80k+ club.
poilcn 8y ago
It could be other way around. Such programs encourage making education/healthcare prices absurdly high as they guarantee the return without any responsibility from the colleges/hospitals/banks/loaners, etc.

dorchadas 8y ago

If I needed any more of a sign to get out of public education, this is it.

mjcohen 8y ago
No. This is more evidence that the Trump administration wants to destroy public education so that more money can be made by things like De Vos.
- justtopost 8y ago
  Pointlessly politisizing an issue says more about you than them.
- gnicholas 8y ago
  Public education? This program probably screwed towards students in private universities, if anything. Higher tuition would mean more students have loans, and larger loans.

RickJWagner 8y ago

A shocking example of the federal government actually doing good work. The article explains the reasons for the rejections. It's pretty clear that rules were established and are being followed.

UncleEntity 8y ago

Huh, isn't at all like the stop-loss payment program they had for military personnel. They sent a bunch of letters which I ignored because (I thought) I didn't qualify until the last one with "Final Notice" so I figured why not? A while later they sent me a check for something like $2,600 -- they were literally begging me to take their money.

cockatoo2 8y ago

Trump working for the people. Nothing to see here. That 150 million is badly needed for his Mar a Lago golfing

musicale 8y ago

This program seems to be poorly structured - the loan forgiveness schedule should not be 0% for 10 years and then suddenly 100%.