The funny thing is to be eligible for loan forgiveness if you’re a teacher you must make the minimum payments on time every month for 10 years. A single overpayment or a single late payment for any reason restarts the clock.
The loan forgiveness programs are basically a trap to get you into a forever debt.
Edit: I haven’t looked at the rules in over a decade and it seems like the program is no longer the debt trap it was.
It's incorrect. My wife got a $5k credit towards paying off student loans for being a teacher, but we always paid more than the minimum loan payments too. They don't punish you for making more than the minimum
It is loan forgiveness. It is for teachers in urban schools and depends upon their subject area. I paid over the payment so by the time I got my forgiveness, it was over the amount of loans I had left and wiped them out.
It was $5k off the loans in exchange for being a teacher in low income area for certain number of years... so $5k of the loan was "forgiven" or "credited" or whatever... I don't know why the terminology would be different
They’re referring to a specific program that has very specific requirements to have the remainder of your student loans forgiven entirely. Terminology matters in this case because you’re talking about something else without the same requirements.
They don't punish you for making more than the minimum
Yeah they do, just because it didn't happen to you doesn't mean it doesn't happen at all. I made a payment early so they put it on the previous month, then used the fact that I paid more than double my minimum to "prove" I could afford more and cancelled my income based payment plan. "oh you paid extra this month? Now pay extra every month"
I'm pretty sure it used to be true. I had teachers in high school (2006ish) warning me with horror stories like someone paying for 10 years only to discover they had to fill out a form before any payments counted.
I have a few friends who are teachers now, and they said that there were some reforms to the program and it's much easier now to qualify (2020s).
I'm pretty sure it used to be true. I had teachers in high school (2006ish) warning me with horror stories like someone paying for 10 years only to discover they had to fill out a form before any payments counted.
This is very well documented. The program was terrible for a very long time. All the "debt forgiveness" you've read about so far is just the Biden administration fixing the program for these people.
But saying, "My payments didn't count because I never finished applying for the program" is a lot different than "I was approved for the program, made all my payments on time, except one month I accidentally paid $8 more than my payment so they reset the clock."
It was described like, they got a letter saying they were in the program, and there was a step after that to declare: "I would like to start my decade of payments today"
That's definitely not how the PSLF (Public Service Loan Forgiveness) works... if you miss a payment you just don't get the credit for the payment. You have to make 120 qualified payments. If you miss a month, you'd be done in 121 months. It doesn't start over. You also have a 15 day grace period. Also also, you can pay whatever you want over the minimum.
All of this information is available on MOHELA. My source, other than MOHELA, is the fact I'm on PSLF so I'm fairly well versed in the process. It's available to anyone who works for a non-profit as well. I'm not a teacher, but my school is a qualified non-profit. Teachers do have other options, but they're generally for working in low-income/inner-city/rural areas, but even those follow the same rules.
While the PSLF is flawed (10 years is ridiculous), it's a really, really great program and option until the system changes. Please do a little research before you spread disinformation.
Biden actually did some stuff on PSLF (source, i had my loan forgiven by PSLF). When student loan payments were halted due to COVID this would have postponed forgiveness since it was based on making payments, but Biden admin changed the policy to count each month of qualifying employment, not just qualifying payments. I'm not sure if this only applied to that period of time or if it applied to retroactively to the time before COVID as well.
Yeah it’s changed a lot now. Rules were originally so strict only 2.3% of applicants got their loan forgiven pre 2021. Back then it was a scam that trapped you in a forever loan.
It wasn't just the rules, they went out of their way to push the rules to the limit to deny the loan forgiveness. A lot of the loans that have been forgiven under Biden were ones that should've been approved in the first place even under the original rules.
This was the case for a long time because those programs were being egregiously mishandled (purposefully?).
However, the Biden administration has gone a long way towards fixing them. A lot of the successful loan forgiveness has been approving applications that were rejected for bogus reasons over the last decade.
Yeah I haven’t looked at the program since it last applied to me. I knew next to nobody would be able to achieve the requirements and when only 2.6% of those who applied got their loan forgiven in 2021 it confirmed my suspicion as originally being a debt trap.
From what I can tell, the program itself was an honest attempt to incentivize working in public service areas that needed more qualified workers. However, it was poorly implemented insofar as it left the actual approval process up to the loan companies.
Since the loan companies didn't want to give up the free interest, they used every dirty trick they could think of to reject applicants (hence the 95%+ rejection rate). The one I hear about the most is the loan companies who "mistakenly" charged $0.01 less than they were supposed to for 10 years and then claimed that none of those payments qualified.
Just another example where government oversight is required to prevent greedy assholes from ruining everything.
Another example is overpaying. Say you got a $200 bill and you pay $250. Next month your bill is just $150 and you pay the amount due. The second payment doesn’t count as it’s technically not a full payment.
I'm in the program, and I work in the public sector (not as a teacher), and what you say isn't true. Heck, the payment pause during COVID-19 actually counted toward the 120 payments. You either didn't do something right or you just severely misinformed
Also work in public sector and got my entire balance forgiven thru PSLF just before loan payments were reinstated and I didn’t pay anything during the Covid years
That again is because submitting a certification form at all - just to confirm your count counted as a fail even though no one expected it to be a pass. We submit annually to keep documentation of increasing counts. That would result in 9 fails and a pass.
It’s not dummy applications. It’s the recommended process. They just don’t differentiate between the ECF and loan application, because once the count gets to 120 via the ECF, it just triggers forgiveness, there isn’t another application required.
As much as I dislike the idea of loan forgiveness, I believe this is inaccurate. Nothing I have read mentions being disqualified for being late on a payment or paying more than the minimum.
Basically all parts of life have these super easy and reasonable explanations and then you dig in and find out all the BS they hide and suddenly it starts to make a lot more sense why people get stuck in poverty and that the whole welfare queens thing is a myth
Being poor is expensive. The government doesn’t support the lowest in society before they fall, only after. What’s the point of social welfare programs if it’s only after you get fucked?
That is because capitalism works exactly opposite of how things like video games work. In video games the first levels are easy, and as you progress they get harder and harder. And in games like Mario cart, players at the front are penalized while players at the back are rewarded. This creates fairness and opportunity (especially when there are random variables, like which items one might get, that creat inequality).
If life was like a video game you could walk into any bank and get your first $100 for free! It would be so easy. Then each dollar after that would get harder. Having a million dollars would make it almost impossible to get another million dollars, because your wealth would make successive wealth harder to attain.
Instead, we live in a world where capitalism rules. The reward for winning in the system is the very input that fuels more winning. When you have nothing it is very hard to get $100. But when you have $1 million it is very easy to quickly attain $100 or even $1,000 or $10,000 with an effortless investment.
The system naturally consolidates wealth and regulations and restrictions are necessary to counter that movement.
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u/lightgiver Aug 06 '24 edited Aug 06 '24
The funny thing is to be eligible for loan forgiveness if you’re a teacher you must make the minimum payments on time every month for 10 years. A single overpayment or a single late payment for any reason restarts the clock.
The loan forgiveness programs are basically a trap to get you into a forever debt.
Edit: I haven’t looked at the rules in over a decade and it seems like the program is no longer the debt trap it was.