US Department of Ed to Help 550,000 Borrowers

October 6, 2021 –
The US Department of Education has revised some rules and made what they term “transformational changes” to the Public Services Loan Forgiveness program, first created in 2007.

In recent years, it has been extremely hard for graduates to get proper loan forgiveness of their Federal Direct Loan(s) for their commitment to work full time in public service for 10 years while making 120 on-time payments to those loans. Reportedly, since 2017 when borrowers first became eligible for the forgiveness, only 2% of participants were being granted the forgiveness(1). That is unacceptable.

According to the press release, some folks will automatically receive the forgiveness, and others may have to supply some additional verification:

This policy will result in 22,000 borrowers who have consolidated loans—including previously ineligible loans—being immediately eligible for $1.74 billion in forgiveness without the need for further action on their part. Another 27,000 borrowers could potentially qualify for an additional $2.82 billion in forgiveness if they certify additional periods of employment.

All told, the Department estimates that over 550,000 borrowers who have previously consolidated will see an increase in qualifying payments with the average borrower receiving another two years of progress toward forgiveness. Many more will also see progress as borrowers consolidate into the Direct Loan program and apply for PSLF, and as the Department rolls out other changes in the weeks and months ahead.

Other changes being made include more leniency on certain certification aspects like, being  few days late on a payment, or a few cents under the amount, that formerly would cause someone to be deemed ineligible.

From what we gather, as a Federal Direct Loan borrower, you should not need to do anything special to get your application re-reviewed. The US DOE says it will reach out directly to borrowers. The one thing you CAN do is make sure your contact information is current with them at StudentAid.gov.

Federal Student Aid will make more information available to borrowers at StudentAid.gov/PSLFWaiver. In the coming weeks and months, the Department will communicate directly with borrowers about these changes to PSLF to help borrowers understand how they may benefit and any actions they may need to take. Borrowers should ensure that they have accounts on StudentAid.gov and that their contact information there is up to date.

BUT… if you have a different type of federal loan (Perkins, FFEL, etc.), you are also being included in this order, but need to apply for a waiver by October 31, 2022 — so a year away.

A limited PSLF waiver that allows all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan. This waiver will allow student borrowers to count all payments made on loans from the Federal Family Education Loan (FFEL) Program or Perkins Loan Program. It will also waive restrictions on the type of repayment plan and the requirement that payments be made in the full amount and on-time for all borrowers. To receive these benefits, borrowers will have to submit a PSLF form by October 31, 2022, which is a single application used to certify employment and evaluate a borrower for forgiveness.

Other resources used in this article:
* (1) New Data Shows Most Who Apply To This Student Loan Forgiveness Program Are Denied, Forbes: June 14, 2021
StudentAid.gov Data Center Loan Forgiveness Program
* US Department of Education Press Release
US DOE Loan Forgiveness Overhaul Fact Sheet
* NPR story
How to Qualify for PLSF – US DOE
Limited PLSF Loan Waiver – Student Aid.gov (for non-Direct Loans)

 

2022-2023 FAFSA Now Available – First Come, First Served

Just released October 1, 2021 is the 2022-2023 Academic Year Free Application for Federal Student Aid form!

Are you even THINKING about going back to school in the Fall of 2022? The time is NOW to get your financial aid forms submitted. Can you believe it? That may seem like a long way out, but it is much easier to cancel aid than try to apply for and receive it next summer.

We recommend that ALL students fill out this form. It is the key to unlocking aid you my not have known existed, or that you may not have felt you qualify for. You don’t know unless you try!

We recommend that you fill out the form as soon as possible as some states run out of funding early. First come, First served.

Visit the Federal Student Aid home page to get started on this years FAFSA.

The IRS provides a “quick and convenient” way to access your tax info using their IRS Data Retrieval Tool, and while it can save you time and ensure accuracy, if you use the retrieval tool, you will not be able to see or edit the data entered on the website. I guess this is a security feature…? If you manually enter the info, you can see and change it.

Also note the FREE part — you do not need to pay anything to acquire or submit the form — unless, of course, you choose to pay someone to consult or help you prepare it.

Just as in years past, there is only a fixed amount of money to go around, so get your application in as soon as possible because the phrase “first come, first served” is very much in play.

But… also keep in mind that the first offer of student aid may not always be the full amount you end up qualifying for!  At some institutions, money frees up later in the academic year as certain students (who were offered financial packages) choose to go to a different school. That money returns to the particular school and is made available to whomever comes asking for it. So, in effect, your student aid can be a year-round effort if you are constantly asking the financial aid office at your school “is there anything else

Financial FAQs

Yes.... Keep trying! And, apply for everything.

Don't discount yourself before you've even entered. Let those on the judging panel decide whether or not you qualify. Apply to ones for which you only have one or two 'qualifications.' Maybe they receive no other applications and they choose to go ahead and give the money to you, even though you don't qualify completely.

There are many scholarships that go unclaimed every year. Through employers, community groups, churches, even companies like CocaCola. Start with the free scholarship matching services such as FastWeb.com. Check out our financial aid help page as well.

For more information, see chapter 3 of The Adult Student's Guide to Survival & Success, "How to Choose Your Program, Get Financial Help, and Become Oriented."

So to reiterate, apply, apply, apply for all the scholarships and loans you can, and remember that for credible sources, there should be NO COST involved for you to do this -- just your time. Numbers are the key. So send in those applications!

Congratulations on keeping your dream alive!

Check out our Financial Aid help page and links on our student links page.

There are several free places to look for scholarships (though, they may request you register). There is no need to pay anyone a fee to join an online scholarship search. Here are a few to get you started:
FastWeb, FinAid, The Old School

In addition, look for another (possibly neighboring) state's scholarship information. While some programs may be state specific, some states do a better job at collecting and presenting general information than others. Here's a list of state scholarship offices. Some may have web presences, search the web on the department name for the state you wish.

I would suggest reading our financial aid tips and applying for as many scholarships and grants as possible. It's a numbers game sometimes--you need to apply to many in order to get a few. Even apply to ones for which you only have one or two 'qualifications.'

Also, check out scholarships offered by local service groups such as the Soropotmists club. Soroptimist International is a women's service group that has as a mission the enhancement of women's opportunities. You may have to look for a local chapter for scholarship information.

Good luck and stick with it. You have the drive to finish and that's half the battle.

Do not fear, you are not alone. Look for scholarships and apply to any and all you find. Scholarships generally don't take into account your credit score or repayment history. Look for state opportunity grants. See some of the tips on our financial aid help page to give you some more ideas.

 

You have a good question for which we do not have a very good answer. Your best bet is to talk to your social worker AND a financial aid counselor at your future school, or one at any school in your state of residency. Every state is different in how it doles out federal monies, and regulations and programs change constantly.

We found this older article Individuals with Disabilities can retain Medicaid or Medicare while working recently, and you may find some useful information there.

This is a catch-22 for sure. While at one time the federal "Welfare-to-Work" may have helped you, the program was discontinued in 2004. Some cities, counties, states and colleges still have similar programs that either stand alone or are part of the Temporary Assistance for Needy Families (TANF) program. You will need to see what is available in your area. Start with contacting your state's scholarship office.

Beware, once in a while, you may encounter a social worker that doesn't have your best interests in mind. He or she may have personal issues which they transfer to the job. It is most often a person who doesn't have a college degree themselves. They may say they cannot help you in any way. They may feel it is not fair to help you fulfill goals greater than their own. If you encounter such a person—which is rare but not unheard of—see if you can speak with their supervisor.


 

You have a good question! Please note that we are not financial advisors and as such cannot comment on your specific situation. However... depending on the funding source, you probably have options on what to spend the "refund" money on.

Many funding sources do have limits on what you can spend on, but others don't. Your best bet is to ask the financial aid office at your school. They will know your funding sources, situation and restrictions.

 

 

We don't have a whole lot of information for Canada, but try these:

EduCanada - Official education site of Canadian government.

Student Aid - Student grants and loans, scholarships, education savings, apprentice loans and grants.

Lifelong Learning Plan - RRSP Withdrawls - Information about using your retirement account to pay for educational expenses.

Maybe a web search on phrases such as "Canadian financial aid for low income students" or "Canadian social assistance education resources."

My advice to your cousin is to apply, apply, apply for scholarships. Sometimes an organization will offer a scholarship that no one applies for. In these cases, if they only get one application who isn't even completely qualified for their specific scholarship, they'll still give the money away.

FAQs compiled by
Kristin Pintarich
Editor-in-Chief, Practical Psychology Press

Beware of your Loan Forgiveness Program!

3 Steps to Help Ensure You’re Compliant

Hands-Money Photo by Alexander Mils on UnsplashUPDATE October 6, 2021: See our updated post as the US DOE has made tremendous strides toward FIXING this problem!!!

It has come to light that since 2017, thousands of former students who participated with full faith and effort in the US Education Department's various loan forgiveness programs — such as working as an inner-city teacher or rural doctor — have gotten "stiffed" on their loan forgiveness applications. Some people have been told they haven’t made the required 120 consecutive on-time payments, even though they have. Some have been told their employment doesn’t qualify, even after being reassured at time of hire that it did.

It’s a sticky situation that started coming to light in 2017, ten years after the program (passed in 2007 by the US Congress and enacted by President George W. Bush) began when the forgiveness time came due. Many borrowers found that due to lack of oversight, important information about their loan payments or work history did not get recorded properly, and their loan forgiveness was denied.

What Should I Do?

If you are currently or planning to take advantage of one of the loan forgiveness programs, we suggest  you:

  1. Log on to the National Student Loan Data System to ensure that your loan record is correct.
  2. Make sure that you keep your Public Service Loan Forgiveness Employment Certification (PDF) current. Clark Howard (consumer advocate hero!) suggests that you file this form each year. Can’t hurt!
  3. Visit the Public Service Loan Forgiveness page and tool
    to see if there is an option for you there. Currently (2019), they show an alert that there is a temporary loan forgiveness program available for some loans. Go now... first come, first served! Warning: You need to apply for the main loan forgiveness program BEFORE applying for the temporary emergency program.

    (9/9/19 note: The US government's General Accounting Office released a report that the US Department of Education is denying over 99% of applications for the temporary program. This is so wrong. All we can say is to apply anyway, be very patient, expect to get denied, and hopefully by the time you appeal the politicians will have a fix. See below for links to find your federal legislature to contact them about this atrocity.)

If you currently do not qualify, you should try to identify and speak to your loan officer, or some other representative from the lender/servicing company to see if they have any options for you. If you don’t know who that is, you can reach out to your former school’s financial aid office and they should be able to help trace your loan.

One suggestion is to consolidate your loans and change it to one of the available income-driven repayment plans which may be available for forgiveness. NOTE: This may reset the 120 month timer, so this option would be better for recent graduates. If you choose this option, know that debt consolidation is a free service. There a several marketers who try to sell you their loan consolidation services for a fee. Know that you are paying for their service, not any fees in connection to the loan consolidation.

Another suggestion is to try to wait it out. The current administration has indicated in their 2020 Budget Proposal a desire to end the forgiveness program (as well as subsidized loans in general) to save the government money. While this is not a guaranteed eventuality as Congress will insert their politics, the intent of the current administration is clear — the students of today don't matter. A new administration may well keep the programs which have allowed so many students to prosper — and contribute long term to the economy! (Just our opinion.)

What Can I Do?

Meanwhile, if you’re the activist type, go ahead and submit your opinion about the future of student loan programs. Here are some links:

US Student Aid feedback
"We want to hear from you about your federal student aid experience."

Raw source for current regulations open to comment on "student aid forgive"

Find your federal legislator (and write them a letter/send an email!):
US House of Representatives
US Senate

US Government Student Loan Forgiveness Statistics

Student Loan Information Resources

NerdWallet 10+ Student Loan Forgiveness, Cancellation and Discharge Programs

Forbes magazine Student Loan info

Resources pulled from Clark.com:

*Note the suggestions in this article are for general information only. Contact your financial professional for advice specific to your situation.

2018-2019 FAFSA Form now available

First come, firs served for federal student aid. Don’t miss out! Get your application in early!

Dollar SignAre you even THINKING about going back to school in the Fall of 2018? The time is NOW to get your financial aid forms submitted. Can you believe it? That may seem like a long way out, but it is way easier to cancel aid than try to apply for and receive it next summer.

In order to allow folks more time to fill our their annual Federal Application for Student Aid (FAFSA) form, it is now made available online on October 1 of the year prior to need.

We recommend that ALL students fill out this form. It is the key to unlocking aid you my not have known existed, or that you may not have felt you qualify for. You don’t know unless you try!

We recommend that you fill out the form as soon as possible as some states run out of funding early. First come, First served.

Visit the Federal Student Aid home page to get started on this years FAFSA.

The 2018-2019 enrollment period has also reactivated access the IRS Data Retrieval Tool. (It closed in early 2017 for security reasons.) If you choose to link to your IRS account via this tool, this can save you time and ensure accuracy. Note that if you use the retrieval tool, you will not be able to see or edit the data entered on the website. I guess this is a security feature. If you manually enter the info, you can see and change it.

Tips

Some tips from fellow students:

  • Make Friends with Your Instructors
    To make the most of your learning experience, and to get the best grades possible, it is good to form a positive relationship with each of your instructors. In some cases this is easy to do: you are dazzled by the instructor’s knowledge, make opportunities to ask questions, and find encouragement to share your views. ...
  • Time Management Tricks 2.0
    Whether you are a business executive, teacher, student, parent, or if you fill any combination of these daily roles, it’s likely that every minute of your day counts and any spare time is valuable. So, how can you use your time wisely? Here are several ideas: Create a Lesson Plan If you are pursing your college degree, ...
  • Angry Mothers on Welfare Must Fight for Education Funding
    Diana Spatz was a single mother on welfare. She encountered many barriers when she tried to get an education to become self-sufficient, but she found ways to overcome them. She now works to help other parents on welfare gain access to funding that is available for their education. Diana says: In 1996, I was a ...
  • Succeeding Despite Invisible Handicaps
    (Comment by Al Siebert: This letter from a college student with mental problems that I counseled is a useful reminder to instructors that some students have invisible handicaps that they may not reveal. "Gil’s" letter also shows that some "challenged" students show amazing resourcefulness and courage in their determination to succeed. Here is his letter…) Well, ...
  • Facing Racism Made Me Better, Not Bitter
    Jackie Leno Grant spent her early years in a comfortable world, surrounded by family and friends. Moving to another town changed all that. As a Native American in a nearly all-white school in rural western Oregon, Jackie felt out of place. Her unfair treatment at school could have made her bitter and rebellious, but Jackie ...
  • An Online Mom Shares Some Tips
    Melinda, an online student of co-author Mary Karr’s, shares her experience being a college student an the mother of young children: Hello Mary, I feel privileged that you would ask for my input. I know very well how challenging it can be to try schooling with young children. First, I have to dismantle my computer system ...
  • From Homeless to Harvard – Liz Murray’s Story
    A few people are born resilient. Elizabeth Murray is one of them. Her parents were cocaine addicts who spent most of the family’s money on feeding their habits. Liz explains that as a result, she and her sister were neglected. The girls often lacked food and warm clothes. By age 15, Liz was homeless. ...
  • Dare to Take Risks to Find Your Purpose!
    We all have a very special purpose in life regardless of who we are or from where we come.
  • Tips for Students on Medications
    The suggestions I have are…
  • How to find time for distance learning while working full time
    When you are working full-time and want to improve your education or gain some new qualifications it can be very hard to find the extra time to study.
  • Beware of your Loan Forgiveness Program!
    3 Steps to Help Ensure You’re Compliant UPDATE October 6, 2021: See our updated post as the US DOE has made tremendous strides toward FIXING this problem!!! It has come to light that since 2017, thousands of former students who participated with full faith and effort in the US Education Department’s various loan forgiveness programs — such ...

How to find time for distance learning while working full time

When you are working full-time and want to improve your education or gain some new qualifications it can be very hard to find the extra time to study.

When you are working full-time and want to improve your education or gain some new qualifications it can be very hard to find the extra time to study. Even with the benefits of studying through distance learning, which allows you to study when you want, finding the spare time to study can be tough. Continue reading “How to find time for distance learning while working full time”

Dare to Take Risks to Find Your Purpose!

We all have a very special purpose in life regardless of who we are or from where we come.

by Stephen J. Hopson

"We are very near to greatness: one step and we are safe:

can we not take the leap?"     — Ralph W. Emerson


We all have a very special purpose in life regardless of who we are or from where we come. I truly believe each of us has a special calling in life even though it took me over 30 years to find mine! What follows is a series of events that have changed my life as a result of my willingness to take risks in the face of absolute uncertainty and trusting my instincts. Continue reading “Dare to Take Risks to Find Your Purpose!”

From Homeless to Harvard – Liz Murray’s Story

A few people are born resilient. Elizabeth Murray is one of them. Her parents were cocaine addicts who spent most of the family’s money on feeding their habits. Liz explains that as a result, she and her sister were neglected. The girls often lacked food and warm clothes. By age 15, Liz was homeless. Continue reading “From Homeless to Harvard – Liz Murray’s Story”