A follow-up to the Finance Article from the March 2019 BEU Newsletter:
Much Ado about Finances
The PSLF Formula for Loan Forgiveness or How to Join the 1% – At first glance, who wouldn’t be discouraged from applying to a loan forgiveness program that’s so “exclusive” it only accepts 1% of the applicants. That’s exactly what happened when the first cohort of borrowers became eligible for PSLF in 2017. Only 1% or 99 of the approximately 28,000 borrowers who applied managed to get their loans discharged. (See MarketWatch article; https://www.marketwatch.com/story/this-government-loan-forgiveness-program-has-rejected-99-of-borrowers-so-far-2018-09-20)
Yes, the process for PSLF loan forgiveness is about as straightforward as a labyrinth and, unlike the labyrinth in Greek mythology, there’s no Ariadne thread to guide you to the exit. It’s an admittedly complex and confusing 10- year- long journey with a long list of specific requirements.
Keys to Successfully Navigate the PSLF Labyrinth
“…they just sort of have this vague understanding that after ten years my loans go away. They haven’t done the research to see that it’s an actual program.” Betsy Mayotte, president of the Institute of Student Loan Advisors.
If there’s one common denominator for the 1% whose loans were discharged, it’s their detailed and systematic approach. This cohort of borrowers did their “research” about the program, verified their eligibility, didn’t rely on their loan servicers for information and kept ridiculously detailed records. (I’ve recommended storing all records for ten years in a fire proof box!)
- Is Your Employer Eligible – If you’re a full-time, PSB educator, you’re eligible!
- Do You have Direct Loan(s)? – You must either have a Direct Loan or a Direct Consolidation loan. (You can use the NSLDS website to verify your loan type.)
- Are You Enrolled in an Income-Driven Plan? – You must be enrolled in an income-driven plan with a 20 – 25 year repayment schedule.
- Have You Made 120 Payments – You must make 120 on-time payments over 10 years!
- Have You Submitted an Employment Certification Form? If there’s one key to success in obtaining PSLF loan forgiveness, this is it! When you file this form, you can confirm that you’re both on the correct path for loan forgiveness and the exact number of qualifying payments.
(Keep copies of all submitted Employer Certification Forms and the Response letter.)
- Have you dotted your ‘i’s and crossed your PSLF ‘t’s? – An unconscionable 28% of PSLF applicants were rejected due to an incomplete application.
Ariadne at your service – If you have any questions or concerns about your PSLF application, I encourage you to contact me: email@example.com
Market Rebound in 2019 –
If you can keep your head about you when all about you are losing
Are losing theirs and blaming you……
Nice to see the portfolio, which closed the year at 954K, ended the month of January at 992K capturing some of the losses from the steep December downturn. When examining the NorthStar end of the year numbers, it’s important to realize that in December the market was on track for the worst start since the Great Depression! (The S&P was actually down 9% for the month!)
Taxes in 2019
* The PSLF program was initiated in 2007 and required eligible borrowers to submit 10 years or 120 payments under an income-driven repayment plan.
David Bowie – Changes
Turn and face the strange