July, 2017: Greetings from DWOQ. As you may have seen in the media recently, the Consumer Finance Protection Bureau (CFPB) issued a report spotlighting borrower complaints about loan servicers mishandling requirements related to the Public Service Loan Forgiveness (PSLF) program. Read more about the CFPB report here.
This recent report is the latest in a series of allegations aimed at federal loan servicers and their dealings with borrowers. While many schools, administrations and advisors still suggest that borrowers go directly to their loan servicers for advice, we at DWOQ have long known that the unique needs of early-career graduate health professionals require an advocate capable of providing prescriptive analysis on available options to make an informed decision. Servicers today simply are not capable of, or have no incentive to, provide this depth of analysis. As a result, we deal almost daily with our clients to repair servicer errors and correct misinformation given to borrowers. Our anecdotes are too numerous to list here, but the recent media articles highlight the issue accurately.
So, let’s briefly discuss the requirements for the PSLF program here:
Launched in 2007, the Public Service Loan Forgiveness program is intended to encourage people to enter public service work despite burdensome levels of student debt. To be eligible, borrowers must have a qualifying loan, be enrolled in a qualifying repayment plan (one of the several income-driven plans available today are best) and make 120 on-time monthly payments while working full-time for a qualified employer. Student loan servicers are responsible for administering these requirements, but administrative issues and process confusion could delay or deny access to this debt relief for public servants.
The first borrowers are expected to reach their 120th qualified payment under the PSLF program in October 2017, resulting in their remaining unpaid balance being forgiven tax-free by the Federal government. However, whether it’s due to insufficient information from servicers or processing delays and errors on qualified payments, many public servants may be shocked to discover they will be forfeiting months or years of qualifying service. This would result in adding hundreds or thousands of dollars to the borrower’s student debt.
Sadly, this wouldn’t be the first time student loan servicers have failed to comply with federal consumer law. Earlier this year, the Consumer Financial Protection Bureau sued Navient, the largest student loan servicer, for systematically and illegally failing borrowers at every stage of repayment.
Maintaining eligibility for PSLF over the course of a decade isn’t exactly a painless process. To stay enrolled in the program, borrowers must recertify their income, family size and relevant profile information each year. This recertification application needs to be submitted on time in order to continue making qualified, on-time payments. Furthermore, an Employer Certification Form should be submitted by the borrower to track the progress of payments and notify the servicer of their intention to work towards loan forgiveness.
Physicians are among the busiest of professionals, so staying on top of all the PSLF eligibility requirements and paperwork can be challenging. Having access to an advocate who has been through this process numerous times can all but eliminate the possibility of simple mistakes and oversights jeopardizing the forgiveness of medical school debt. This has been DWOQ’s mission from day one: helping medical professionals navigate this complicated process in a way that maximizes their potential savings.
If you’d like to schedule a consultation with our Advisory team, or if you have questions in regards to how PSLF would apply to your specific circumstances, just visit the consultations tab of this site, or contact us at email@example.com for further information.
‘til DEBT do us part,Jason DiLorenzo
Doctors Without Quarters, LLC
Brandon Barfield is the President and Co-Founder of Student Loan Professor, and is nationally known as student loan expert for graduate health professions. Since 2011, Brandon has given hundreds of loan repayment presentations for schools, hospitals, and medical conferences across the country. With his diverse background in financial aid, financial planning and student loan advisory, Brandon has a broad understanding of the intricacies surrounding student loans, loan repayment strategies, and how they should be considered when graduates make other financial decisions.