If you work for a 501(c)(3) or some other tax-exempt organization and are hoping to have some of your federal student loan debt discharged under the Public Service Loan Forgiveness (PSLF) program, you may be in for a rude shock.
In a March 30 story, the New York Times reports that the U.S. Department of Education (ED) is taking the position that thousands of PSLF approval letters sent by FedLoan Servicing Servicing, the company ED hired and supervised to administer PSLF, were invalid.
FedLoan’s letters reportedly confirmed to borrowers that the jobs they held with nonprofit organizations qualified them for PSLF. However, many of these decisions wete retroactively declared invalid, and affected borrowers got no explanations or opportunities to appeal. According to the Times, four borrowers and the American Bar Association have gone to court against ED to restore those borrowers’ lost PSLF eligibility.
What should you do if you get caught up in this mess? Ultimately you, too, may have get a lawyer and take ED to court. But you should also:
* Contact your U.S. representative and senators to ask them to intervene with ED on your behalf; and
* File a complaint with the Consumer Finance Protection Bureau because members of congress interested in passing a bill to fix this problem will no doubt ask it provide accurate input on the problem and how many Americans are affected.
* Most of all, whether or not you’ve been informed that ED has invalidated correspondence you’ve received from FedLoan, keep working with your employer to submit your PSLF certification form once a year; and stay on top of of this issue by monitoring for developments related to it on the internet, in the news media, or on this website.
College Affordability Solutions will its best to keep you posted on this in the future.