The Public Service Loan Forgiveness (PSLF) program offers loan forgiveness for eligible borrowers who work full-time for qualified employers (generally governments and non-profits) and make 120 qualifying monthly payments.
The first cohort of borrowers seeking to qualify for PSLF completed their ten years of service recently. Many were dismayed to discover their applications for loan forgiveness were rejected. The rejection rate was a stunning 99%!
The government responded by creating a Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. In late 2019 the revised plan still rejected 99% of applicants. According to a January 31, 2020 NPR report, it was discovered that “71% of denials were essentially due to a paperwork technicality. According to the GAO [Government Accountability Office], more than 38,000 applicants were denied relief under the [TEPSLF] expansion ... simply because they hadn’t first applied for and been denied PSLF.”
There’s been an outcry over the unnecessary complexity of the program and its draconian rejection rates. It’s understandably devastating for doctors who believed they were abiding by program requirements to suddenly discover their sizable loan obligations are not being discharged.
While we all hope the government will make the process more seamless, fair, and transparent, there are no guarantees.
Accordingly, if you are on a PSLF path or would like to embark on one, I strongly recommend you prepare—financially, mentally, and emotionally—for PSLF rejection.
Look up the latest information from official government sources to ensure you abide by all PSLF requirements. According to some reports, being late on a single payment could make you ineligible.