Any experience with Student Loan Forgiveness - Public Service

[Kimmy]

Does anyone here have any experience with Student Loan forgivness for public service? After the 10 year period, how much is forgiven?

Public Service Loan Forgiveness | Federal Student Aid

 

[Mapper]

I've been VERY curious about this too. Look forward to hearing what people know.

When I first started my HR person said my agency doesn't do it. Then again my HR person didn't know squat about squat and most people in my building were 20-30 year employees when I started. Jeez, my starting paperwork done by HR was a mess...every form filled out had my name spelled incorrectly and in different mis-spellings. Even after 3 years I keep seeing errors pop up. I have to re-check to make sure the initial answer I got was not totally mis-informed.

 

[jpcavin]

Does anyone here have any experience with Student Loan forgivness for public service? After the 10 year period, who much is forgiven?

Public Service Loan Forgiveness | Federal Student Aid

If I read the link you provided correctly, it states "Under this program, borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full time by certain public service employers.

 

[Kimmy]

I read the remaining balance part but that seems expensive for the government. So, I was looking for dollar limit or percentage limit. But remaining balance works for me.

If I read the link you provided correctly, it states "Under this program, borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full time by certain public service employers.

 

[jpcavin]

I read the remaining balance part but that seems expensive for the government. So, I was looking for dollar limit or percentage limit. But remaining balance works for me.

Well, if the student loans are paid monthly, 120 payments equals 10 years. Ten years worth of payments before you are forgiven, hardly seems like a free ride, but I suppose it depends on the interest rate and how much was borrowed. :cheesy:

 

[burrocrat]

some of the fine print:

only timely payments in a qualifiying repayment plan count towards the 120 required for forgiveness, standard, income-contingent, and income-based. payment schedules like extended or graduated do not count towards the total. the standard repayment is amortized over 10 years so 120 payments would leave you with exactly zero to be forgiven 10 years down the road.

income-based and income-contingent monthly payments are calculated as a percentage of discretionary income above poverty level for family size and how much you borrowed. in reality a married couple who both work with one or two kids is not poor, so very little reduction in payment occurs. once the employed is making the equivalent of approximately gs-07 salary you will be moved to the standard payment plan for the remainder of your 120 payments.

there are obvious ways to game the system, single parent 3 kids perpetually employed at gs-05 will have more forgiven after 10 years than a single individual in an upwardly mobile career ladder position. but there are probably not very many college grads with student loan debt whose resume reads stagnant government clerk and ghetto mammy. most who qualify for the program will only have 2-4 years at reduced monthly loan payments before paying the standard plan full frieght.

rough calculation is $40k debt at lowered payment for a few years gets $8-10k forgiven after 10 years. less than $1k/year or $100/month. given the lack of cola's, reduced benefits package for new hires, increasing workload as vera's and hiring freezes work their magic, not to mention public perception of gov employees, and loan forgiveness seems not to be as big an incentive as promoted. there may be other rewarding careers that pay in excess of $100/month vs. gov that one could pursue and be financially better of not qualifying for loan forgiveness.

biggest caveat of all: student loan forgiveness is a 'play now pay later' promise cooked up by politicians and as such is subject to change, most likely at about year 9-1/2. ask detroit how that is working out for them.

 

[burrocrat]

I've been VERY curious about this too. Look forward to hearing what people know.

When I first started my HR person said my agency doesn't do it. Then again my HR person didn't know squat about squat and most people in my building were 20-30 year employees when I started. Jeez, my starting paperwork done by HR was a mess...every form filled out had my name spelled incorrectly and in different mis-spellings. Even after 3 years I keep seeing errors pop up. I have to re-check to make sure the initial answer I got was not totally mis-informed.

you are talking about your employing agency actually paying your student loan payments, i don't think in this budget environment any agency is using those kind of hiring incentives.

the program Kimmy is asking about is offered by dept. of education as authorized by congress. talk to them or whatever private company is servicing your loans. send them a copy of your taxes and apply for icr or ibr. if you are poor enough then take the lower payment plan. you will send them your taxes every year to make sure you remain poor enough. if after 10 years you are still poor they will let you off the hook.

only payments made on time in a qualifying repayment plan while employeed by gov count.

also, i think you have to sign up for the forgiveness plan through dept. of edu before payments count. prior payments even if employed by gov don't count until you sign up. my online student loan account info tells me how many qualifying payments i've made. i have a loooong way to go to maybe realize any benefit. i like and believe in what i do for gov, if my motivation was eliminating student loan debt or getting rich i could do much better in many ways financially by working in the private sector. but if they want to kick me back a few grand in 10 years i ain't gonna stop 'em.