Articles Posted in Student loans

Published on: folks are receiving payment notices for federal loans even before February when the Great Restart is anticipated.  Why is this?

A few months ago, Congress finally addressed the older Federal Family Education Loans (FFEL or FFELP loans), and in the expansion to the CARES Act, ensured that all defaulted FFEL loans cease collection and receive a 0% interest rate, same as the newer Direct federal loans.  In addition, any FFEL loan that went into default since March 13, 2020 would be returned to good standing.  All guarantee agencies who held these loans were to assign them to the Department of Education and it was requested that the credit bureaus remove the record of default.

Note this was only for those FFEL loans which were already defaulted, or went into default during the pandemic.

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We are happy to share our thoughts on the new Public Service Loan Forgiveness Waiver announced last month.  It truly will fix most all of the problems with the PSLF program and we have already seen many clients benefit!

I was asked to present a webinar for the Florida Bar this week and over 500 people registered.  That’s a 10x of their usual number of 50.  Lots of demand to understand a new and important way to forgive student loan debt.  And you have until October 31, 2022 to act.  While that may seem like a long time away, a year goes by fast and why wait.  Why not get this done now and be done with these loans if you’ve already made 120 payments but found that many if not most never qualified.  They are likely to qualify now, provided you worked full time for a government agency or a qualifying non-profit.

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Well this was a surprise! Polk State College was in the news today after having given a student loan write off press release.

Students enrolled at this college between March 1, 2020 and June 30, 2021 are eligible for debt cancellation.  This is separate from all the federal programs that are undergoing overhauls.  I wonder if this is a sign of future write offs by other small colleges???

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map-internationalWe’ve been getting more questions lately from folks who have taken out U.S. loans (both federal and private) but now may live or work overseas.  Saudia Arabia today, someone from Turkey last week.  We can certainly advise these borrowers what action they can take under the new Public Service rules, discuss collection limitations, statutes of limitations etc.  We welcome your calls, just set a consult with us.

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Published on:’s a lesser discussed requirement for TEPSLF: If the borrower is not in an IDR plan at the time they apply for TEPSLF, the previous 12 months of payments and the last payment made have to be at least as much as they would have paid in an IDR plan.  If they weren’t, the borrower would have to make potentially higher payments for a year in an IDR plan before they rec’d forgiveness.

However, if the borrower has been in the Covid Forbearance since March 2020 and they filed for TEPSLF now, they would meet that requirement because everything has been set to $0. They would need to file before the Covid Forbearance is over (1/31/2022) to avoid this issue with TEPSLF.

Also Note: The PSLF Temporary Waiver makes TEPSLF unnecessary for now as all repayment plans are eligible.  If a borrower wasn’t ready for TEPSLF until after 1/31/2022, they may be eligible through the Waiver.

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Borrowers seem to be confused about:

— the deadline, reading it to be in 2021, only 3 weeks away  (the deadline is actually October 2022)

— the effect of consolidation, believing they’ll lose a favorable interest rate, and that the interest rate will even matter  (when on an income drive plan, payments are determined on income, and payments will not go up due to interest changes)

Published on: longstanding problem has plagued PSLF borrowers when they try to get their 120 payments calculated for public service student loan forgiveness.  Lost records, payments not counting b/c they were for the wrong amount even by a few pennies, paid ahead status, wrong payment plans, change in servicers, multiple year long delays —  I could go on and on…. This week’s announcement by ED that it will start to more broadly interpret the rules surrounding what a qualifying payment is will help tremendously.  Here’s some insight into what we may start to see shortly:

Ian Foss of US ED offered some interesting details during Wednesday’s negotiated rulemaking as he explained the emergency action, and what changes they hope to make permanent. If we understood him correctly they want to get away from counting payments completely and simply give credit for months since entering repayment on any FFEL or DL. This is the result of counting all payment plans, as well as some/all deferments, and maybe even forbearance periods. This approach would also solve all the problems created by the 15-day on-time right-amount payment rule, for all those who were told the wrong payment amount, made lump sum payments from assistance programs, etc.

As things stand now, we aren’t seeing any help out there along these lines for those with Parent Plus loans or Spousal FFEL Consolidation loans — YET.  Stay tuned…

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pslfSo what’s on tap for today?  Huge news, the Public Service Loan program will now consider payments on Federal Family Education Loans (FFEL or FFELP).  ED’s press release for this PSLF overhaul can be found here.  This is the biggest roadblock for student loan borrowers who have attempted to have their student loans forgiven due to public service.  Our law firm has fought this issue for years, even filing class actions with class co-counsel against Navient and Great Lakes, when our clients alleged that their servicers led them down a path toward forgiveness only to find it later blocked when they had the wrong loan type.  Or making the wrong payment.  No one told them this.  Instead, they were told they had to start their ten years of payments ALL OVER AGAIN after they changed their loan type to now qualify.

No more.  There are some new hurdles, but with proper guidance, everyone who has worked public service for ten years will now finally receive the forgiveness they were promised.  Things to know:

  • If you’d been denied for filling out the forms wrong but have made 120 payments on a Direct loan you will automatically receive a refund for any qualified payments you made in excess of 120.
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According to NPR: Department of Education is planning a MASSIVE change to PSLF rules via negotiated rulemaking to give retroactive credit for payments made on FFEL loans and loans that were later consolidated into Direct Consolidation loans.

I got ahold of the issue papers in which the Department of Education is telegraphing future changes to all kinds of things.  Gotta take some time to digest this, and will get some points out on our Student Loan Sidebar Youtube channel asap.

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