Public Service Loan Forgiveness Program Archives

First Wave of Public Servants Awarded Student Loan Forgiveness Through Temporary Program

Posted on November 27, 2021by Admin

The Biden administration recently announced the introduction of a temporary expansion of the Public Service Loan Forgiveness program. The program cancels outstanding student debt for public servants.

In order to be eligible, debt holders must have made 120 payments toward their federal student debt on-time for at least 10 years. The loans must have been made through the federal government and payments must have been made through repayment plans, most of which are based upon income. They must also work for the government or one of the non-profit organizations specified by the program. Many teachers, public defenders, Peace Corps workers, and law enforcement officers may qualify for forgiveness.

Teachers Sue U.S. Over Student Loans that Were Not Forgiven

Posted on July 23, 2019by Admin

The American Federation of Teachers has filed a lawsuit against the U.S. Department of Education on behalf of educators who argue that they have been wrongfully denied loan forgiveness under the federal public service loan forgiveness program.

The Public Service Loan Forgiveness program was created more than a decade ago to encourage young graduates to seek employment in a government job or in public service industries. While the pay in these types of jobs tends to be lower, the promise of having their federal student loans forgiven at the end of a ten-year period was created to entice them to apply for these positions.

Under the program, borrowers who work in certain public service professions, including law enforcement, nursing, and teaching, and who make payments consistently for ten years, can have their federal loans forgiven. It is estimated that more than one million borrowers have filed official paperwork to participate in the program. However, many of these borrowers are finding out that they suddenly do not qualify for forgiveness for one reason or another, including not carrying the correct type of loan.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

President Trump Plans to End Student Loan Debt Forgiveness Program

Posted on March 13, 2019by Admin

The White House has released President Trump’s budget proposal for 2020, and many of the cuts take aim at the student loan debt crisis. Here are some of the specific proposals, which could affect borrowers’ ability to pay off their student loan debt.

The end to public service loan forgiveness. According to Trump’s proposed budget, the Public Service Loan Forgiveness Program would be eliminated. The effects could adversely impact members of the U.S. Armed Forces, police officers, firefighters, first responders, prosecutors, public defenders, and other public servants.
A change to federal student loan repayment. The number of income-driven repayment plans would be reduced to just one. Current plans, such as PAYE and REPAYE, allow borrowers to repay their federal student loans based on income, family size and additional factors, and can result in student loan forgiveness. The changes would favor undergraduate borrowers who typically earn less than graduate school student loan borrowers. Monthly student loan payments would be capped at 12.5% of income and after 15 years of monthly payments, any remaining student loan debt would be forgiven. This is five years earlier then the current income-driven repayment options. Graduate student loan borrowers would see the opposite effect – a five year increase to student loan debt repayment before their loans are forgiven.
The end to subsidized student loans. Subsidized student loans has traditionally meant that the government pays the interest costs on federal student loans while borrowers are enrolled in school. The rationale behind eliminating these type loans is to save the federal government money by collecting additional interest. This could result in the cost of a higher education being that much more expensive due to additional interest costs.

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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Student Loans

Trump’s New Budget Puts an End to Student Loan Debt Forgiveness Program

Posted on September 21, 2018by Admin

The President’s new budget proposal seeks to make major cuts to important student loan forgiveness programs and affordable repayment plans. The proposal, officially announced this week, seeks to cut income-based loan repayment programs and eliminate the Public Service Loan Forgiveness Program.

President Trump’s budget will also eliminate subsidized student loans. It is estimated that in the 2016-2017 school year, approximately 5.7 million students have subsidized loans. The budget will also reduce the number of income-based repayment plans offered to students. These plans allow the borrowers to pay back their loans at a rate that is proportionate to their income. The budget sets to drop these student loan assistance programs from four to one. The one program that is left caps students’ monthly payments at 12.5 percent. Under most current income-based repayment programs, student borrowers pay 10 percent of their discretionary income.

Also, under this program, undergraduate student borrowers would end up having their loans forgiven sooner, dropping the timeline down from 20 years to 15 years. They would end up paying more per month under this program, but for a smaller length of time. On the other end of the spectrum, however, graduate students will not have their loans forgiven for 30 years.

The Public Service Loan Forgiveness (PSLF) program was created under the College Cost Reduction and Access Act of 2007 to encourage graduates to work in public service while offering them a benefit of eliminating their federal student loan burden. These public service positions include public school teachers, social workers for the state or health researchers. If the student borrowers work in these positions and continue making payments on-time for 10 years, they can have their loans eliminated. It is estimated that two-thirds of student loan borrowers have expressed an interest in the PSLF program. These students are reported as making less than $50,000 annually. Trump’s budget plans to eliminate this student loan forgiveness program entirely.

If this program is eliminated, many are worried that college graduates will be less likely to apply for and take public service jobs. This elimination will end with fewer public defenders, public school teachers, state social workers, legal aid providers, even law enforcement. With their pay being lower than what it would be in the private sector, these borrowers are not going to be able to meet their monthly obligations, especially if the government makes it more difficult for the student to apply for an income-based payment program.

In addition, the budget cuts funding for approximately 30 other higher education programs, including the Supporting Effective Instruction State Grants, the Federal Supplemental Educational Opportunity Grant, and 21^st Century Community Learning Centers.

These changes would begin for students who borrow after July 1, 2019. The President’s proposal has been submitted to Congress and is subject to their approval. It is predicted that the budget will be modified; however, it remains to be seen what these modifications could entail. Student loan advocates hope that these modifications will restore some of the programs eliminated through this budget proposal. The alternative could mean very tough times ahead for student loan borrowers.

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Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Government Likely to Forgive Billions in Student Loan Debt – but only if you qualify

Posted on October 12, 2016by Admin

Student borrowers who have been working since 2007 in public service are looking forward to next year. This will be the first time the government will forgive debt under the Public Service Loan Forgiveness (PSLF) program. The program states that individuals who work for ten years in specific careers are eligible to have the remaining balance of their loans forgiven.

These areas include working for:

Non-profit organizations;
Libraries;
Schools;
Certain government jobs.

To qualify, borrowers must make on-time payments on their student loans during the ten years they work in public service. The payments can be made under an income-based repayment plan if the borrower qualifies.

With as many as 25% of working individuals qualifying, the government may have to forgive more than anticipated. More borrowers took advantage of the program than the government had expected. The average amount of loans carried by those in the program is $60,000. About 30% have debt over $100,000. This means the government will have to forgive more than $12 billion in student loans between 2017 and 2027.

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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.