Panicked student loan borrower: ‘I’ve changed my life based on their promise’


More than 400,000 people have planned their careers and financial futures around the Public Service Loan Forgiveness program.

With the promise of debt forgiveness after 10 years of payments, the government program has allowed some people to return to school and pursue their dream jobs. It’s helped them buy homes and start families while still paying off their debts.

They chose careers as teachers, public defenders, social workers, and primary care doctors. Many work in low-income areas for below-average pay, despite their loans. Some have moved to different states and turned down higher-paying, private sector jobs to stay in the program.

Now they’re hoping it wasn’t all for nothing. President Trump’s proposed budget, released Tuesday, calls for eliminating the already-troubled program for new borrowers. The cut, which requires an act of Congress, would save $27.5 billion over 10 years if enacted.

While the proposal offered some clarity to existing borrowers who are already working toward loan forgiveness, it adds to the growing uncertainty surrounding the program.

Passed by a Democrat-controlled Congress and signed into law by President George W. Bush in 2007, the program promised loan forgiveness for government and nonprofit workers after they made 120 months of on-time payments. This October marks its 10th year and the first time anyone will have made enough payments to get their debt wiped away.

From the beginning, student loan borrowers struggled to navigate a confusing program with plenty of caveats. You need to have the right kind of loan and be enrolled in the right kind of income-driven repayment plan.

“It’s one of the more convoluted programs that Congress has designed,” said Rohit Chopra, the former student loan ombudsman at the Consumer Financial Protection Bureau.

Without so much as a form to submit to see if they qualified until 2012, borrowers had to have faith that they had all their ducks in a row. But the CFPB has received numerous complaints from borrowers who were told they were not enrolled after years of making payments they thought had counted toward debt relief.

In December, four borrowers sued the Department of Education claiming they’d been misled by their loan companies to think their jobs qualified when they did not. In court documents filed earlier this year, lawyers for the Department of Education suggested that borrowers could not rely on certification from their loan servicer.

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