Public Service Loan Forgiveness: What You Need to Know

Do you have any student loan debt?


My goal is to help you with your finances. Student loan debt can become a major hurdle for most people. That’s why I wanted to interview Robert Farrington.


He's the founder of The College Investor which is the number one resource that is helping millennials get out of student loan debt and start building real wealth for their future.


(Hey, hi, hola... here's the audio version in case you missed it!)


He's been helping people with their finances since 2009 because of his own experiences with money in college.


Let’s see what tips he has to share.


Why did you start The College Investor?


Robert states he was in his last year of college and wanted to share my thoughts about investing and building wealth. However, his loan servicer messed up his payments. That’s when it became a big hairy mess.


He explains in his own words:

I had it all set up on direct debit. For some reason, my payment was canceled on my account and something didn't go through. They tried to say I was late, and I had to go to battle it out with customer service (one of the big loan servicing companies). I wrote about it, and it was one of the first articles that really, got a lot of comments and shares.


Robert went on to say that there were a lot of people who had similar stories. It seems the loan servicers are a maze of confusing bureaucracy and hard to workaround. Robert has been talking about the options for handling student loan debt for 10 years--and not much has changed.


If you have any experience with student loan debt or servicers then you know what a huge topic it is.



Wait...what? How does PSLF work?


You must have 120 qualifying payments before you apply for public service loan forgiveness. You’ll need the annual employment certification forms as proof that you qualify.


Let’s take that a step further, those forms must be filled out impeccably.


Occasionally, the powers to be will come up with a new type of repayment plan. Robert, says these additional plans are just a facade of choice. Unfortunately, they are only adding to the confusion.


Most people are still struggling to understand the process, and they’re wondering: Am I eligible? What is the PSLF process?


As a teacher, you are eligible for public service loan forgiveness, which is the right loan that hasn’t been refinanced.


Teachers are afraid to jump in because they’ve been told that only 1% of people have actually received public service loan forgiveness.


Let me jump in and say that my advice is the last source that you should take information from regarding public service loan forgiveness should be Fedloan Services.

What did Robert have to say?


There are zero risks to public service loan forgiveness, and it's not going away. If you're eligible now, you're going to continue to be eligible. It's written into your promissory notes.


These loan servicers do have systemic issues. But on the flip side, if I were to tell you that I'm going to give you a $50,000 check, and all you have to do is three things. The three things are to have direct loans, have a qualifying repayment plan and qualifying employment and I'm going to give you $50,000.


Do you think that you would make sure you've met that criteria to do it?


Back to the Program


I told Robert that under those circumstances, I would do it!


However, let’s break it down. Robert said you must have Direct Loans.


Then it’s divided two ways:

If you had student loans before 2007 (you don’t qualify)

If you had student loans after 2007 (you do qualify)



Calling Fed loans


Do you dread calling the servicer?

It turns out there may be a good reason. Robert pointed out something very compelling. The people who answer the phone aren’t financial planners. They are customer service representatives who earn $10 to $12 an hour, they aren’t meticulously trained.


More importantly, if you must ask them the right questions to get the right answer (but you still might get the wrong answer).


Robert has some good suggestions, let’s hear what he had to say...


You could go online, you can look at your dashboard yourself. You can see your loan type. You can do everything 100% without ever speaking to a loan service person.


In fact, I advocate that you never call a loan servicing company. I advocate that you do everything online, and you do everything via paper and you keep that paper trail for yourself for these reasons.


I agree wholeheartedly with Robert’s suggestion to document everything. It’s important to keep detailed records and a paper trail.


Especially the all-important annual certification form!


OK, quick check in!


How did you like this blog? If you've found it helpful and enlightening, please share your thoughts in the One Million Apples Facebook Community!

Or... if you find yourself in need of someone who can help you navigate your way through your financial plan, check me out at Wealth of Confidence!

I'd love to help you.

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