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Borrowers Get Another Chance To Cancel Civil Service Loans

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People who apply for a utility loan rebate know how difficult the program can be to navigate successfully. Less than 5% of those who requested relief were approved.

The US Department of Education announced it would give borrowers excluded from the debt cancellation program – often for a technical reason, such as their federal loan or repayment plan – another chance to qualify. (The PSLF program, which was enacted by then-President George W. Bush in 2007, allows nonprofit and government employees to cancel their federal student loans after 10 years, or 120 payments.)

If you have been told that you are not eligible, you may no longer be.

You’ll want to act quickly to try to take advantage of the government’s second chance. That’s because it expires next October, said Bridget Haile, operations manager at Summer, which helps borrowers navigate repayment.

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“We advise people to start as soon as possible,” Haile said.

If you have a Federal Family Education Loan (FFEL) or Federal Perkins Loan, which normally does not count towards the Public Service Loan Cancellation but now does so temporarily, you will need to consolidate them into direct loans with your service agent.

“It usually takes 30 to 45 days for consolidation to occur,” said higher education expert Mark Kantrowitz.

In addition, borrowers will also have to prove that their work was considered a public service for the time they are trying to get forgiveness.

“Certify all of your public service employers that you have since as far away as possible,” Haile said. You will want to drop a employer attestation form for every employer, say experts.

On studentaid.gov there is a tool it can help you do that.

Experts also advise to download and save records showing the number of the required 120 payments that you have made.

If your total number of payments, after counting those previously disqualified, exceeds that number, you should be refunded, Kantrowitz said.

More information about curriculum changes and updates can be found on the Education Department’s website. website.