• Christine G. Anderson

Public Service Loan Forgiveness in the Time of COVID-19

If you stumbled upon tens of thousands of dollars just lying on the street, you’d pick it up, right? Um, yeah, of course, you would! But many educators who are eligible for college student loan forgiveness don’t take advantage of the various programs. These people are walking right past that big pile of money.

New educators, even if you have not yet made 120 qualifying payment on your student loans, we'll tell why you should apply now...and keep re-certifying each and every year.

In this webinar, we'll go through a step-by-step plan for student loan forgiveness, including:

  • Identify your student loan(s)

  • Explore the new NEA Student Loan Navigator by Savi

  • Get on an Income-Driven Repayment (IDR) plan now

  • Apply for the Public Service Loan Forgiveness (PSLF)

  • Explore other forgiveness options for educators

  • Understand the CARES Act, what it means for you, and how NEA/MEA can help you navigate through this crisis

If you want more info on student loan forgiveness programs, read on. If you want to skim and then attend one of our cadre webinars, excellent! We've had continued success with our free Student Loan Navigator by Savi, which will be covered in the webinar. 

Approximately 37% of adults under age 30 have outstanding student loans. Looking only at those with a bachelor’s degree or higher levels of education, the percentage of those with outstanding student debt jumps to 53%. As of 2016, the median student loan debt for bachelor’s degree holders was $25,000 while those with postgraduate degrees owed a median of $45,000. According to a report from the American Association of University Women, two-thirds of all this student debt—nearly $900 billion as of mid-2018—is held by women. Teachers much?

"But No One Gets Approved!"

At last report, only 6% of those who qualify for the program actually file the paperwork! We've heard this woeful refrain over and over in MEA's student loan training: "I didn't even bother because I heard no one gets approved!"

Dire headlines abound. No wonder you have a negative outcome planted in your mind.

Student Loan Forgiveness Scam Promises to Cancel Debt - Freep July 2019

Broken Promises and Debt Pile Up as Loan Forgiveness Goes Astray - NYT Nov 2019

6 Reasons Student Loan Forgiveness Might Not Be Worth It - Student Loan Hero Nov 2019

Is Student Loan Forgiveness Worth It? - Forbes Jul 2018

Student Loan Forgiveness is a Bad Idea - Medium Jul 2019

The Truth - Some Data From PSLF as of March 2020

The most common reason an Employment Certification (ECF) form denial was missing information on applications (78%). At this point, you haven't even gotten to the Public Service Loan Forgiveness (PSLF) application itself.

From those 2,870,880 ECF forms, only 344,505 were completed properly. From those emerged just 188,396 PSLF applications. Applicants were simply giving up, thinking it was lost to them forever. The most common reasons for PSLF ineligibility were 120 qualifying payments not yet completed (59%), missing information (23%), and loans that didn't qualify, such as commercial and private loans (14%).

Not so bleak, after all. All you have to do is get the forms right. Those who ran the gauntlet were approved for an average $63,353 balance discharge.

Big savings for those who qualify for PSLF

It’s important to note that this program qualifies you only after 120 payments—that is, after 10 years. It went into effect in 2007, so the first actual forgiveness window was in October 2017. The standard loan repayment program pays down the loan in 10 years, so to benefit from forgiveness under PSLF a borrower would have to slow down payments by enrolling in an Income-Driven Repayment (IDR) plan or some other form of extension.

There are other options available to teachers for loan forgiveness and exploring them will be well worth your time regardless of the obstacles. Such options are extended to teachers because it’s forecast that the United States will need more than 425,000 educators by the end of the decade to replace retiring baby boomers, and the profession’s average starting salary is only $38,617.

For instance, you can have as much as $17,500 of a subsidized or non-subsidized loan forgiven through the federal Teacher Loan Forgiveness program, also discussed in the webinar. This applies to the William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Family Education Loan (FFEL) Program loans. You’re eligible if you’ve been teaching full-time in a low-income elementary or secondary school, or an educational service agency, for five consecutive years.

In addition, the Federal Perkins Loan Program allows for loan cancellations up to 100% after five years if you:

  • Serve full-time in a public or nonprofit elementary or secondary school system as a teacher serving students from low-income families, or

  • Are a special education teacher, or a teacher in fields of math, science, foreign languages, bilingual education or other specialties for which your state determines there is a shortage of qualified educators.

Short of loan forgiveness, an IDR plan such as the Income-Based Repayment (IBR) plan sets a borrower’s monthly payment at a fixed percentage of your income so that payments become more manageable. As your income rises, your monthly payments will go up accordingly.

Sources: American Association of University Women; Pew Research Center analysis of data from the Federal Reserve Board’s 2016 Survey of Household Economics and Decisionmaking; FedLoan Servicing via studentaid.ed.gov; PSLF Program Data 3/31/2020; NEA.org data.

© 2017 Christine Anderson

Contact Me

Tel: 269.344.7428


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