In response to an inquiry from Kaine, the Education Department
disclosed last week that 38,460 people had submitted requests
for forgiveness as of Dec. 28 under the new program. Most of
those, 28,640 people, were immediately rejected because they
had not previously filled out a formal loan forgiveness
application — one of the many criteria of the relief program.
Of the 9,820 applicants who cleared the first hurdle, 1,184
are still under consideration. The rest were rejected for
myriad reasons. Of the applicants who cleared the initial
hurdle, 40% still had years to go before hitting the required
10-year mark. Nearly a quarter were ineligible because they
were paying less money in the wrong payment plan than they
would have in the correct one.
Others were turned away for having the wrong type of federal
loan — those originated by private lenders through the
now-defunct Federal Family Education Loan Program. Some had
not made enough on-time payments or had not had at least 10
years of full-time employment certified by a qualifying
employer, according to the department.
I really don't see the problem here. People aren't qualifying for the program (many in obvious ways, such as not meeting the 10 year minimum, or making on-time payments), and I'm supposed to (from the article's clear intent) feel outraged by this?
I can see your point. But it does sound like a SaaS product that deliberately makes it hard to cancel but legally doesn't have to stop charging your card.
It clearly says you need to have had the loan for 10 years and been paying on time payments and have a stable job. Those requirements don't seem absurd, outlandish, nor designed to make people fail.
If you don't meet those minimum of requirements, why would the tax payer want to forgive your debts - you clearly didn't hold your end of the bargain, yet want to be released of potentially thousands or tens of thousands of dollars of public-money debt.
I think you might feel differently if you'd actually read the documentation as it existed 8 years ago (I've not looked at this in years).
Or talked with customer support agents for the program that who told my wife that a formal loan forgiveness application was not required, and would be a waste of time. Just meet the criteria and apply when your 10 years were up.
But what those criteria were was not described clearly enough to make 10 year plans on. And the general confusion was so massive, the program so obviously a shambles, that we decided there was little chance that the program would survive, and passed on it.
The point still stands, however. For a program as controversial as this (loan forgiveness in general, that is), it's amazing there's any program at all.
Those wishing to be granted forgiveness have a clear list of requirements they need to meet in order to be considered - yet the article wants me to be outraged at the current administration because so few people that applied bothered to even read the requirements.
I think the point is that requirements are/were explicitly unclear and that otherwise minor deviations (like a payment being received on Monday rather than Friday) are used as justifications to make people - who have made financial and career sacrifices based on the expectation of loan forgiveness - ineligible.
It's used to incentivize public service jobs. Someone with $100k+ in loans can take a lower paying local government job instead of having to work elsewhere to pay off the loans.
This is assuming that your payments are enough to beat the interest your loan accrues. Having large student loans could also discourage people from doing things such as buying homes or reinvesting that money into the economy.
Effectively, every dime you put down towards interest on a federal loan is money that could've been spent towards things that benefit the market. If you were to take a pure free market approach, federal student loans are theoretically a Very Bad Thing and it should be in the government's interest to reduce those.
I believe the concept of this program is to act as an incentive for (former) students to go into public service. If nobody can use it because of kafka-esque procedures, then the program isn't serving its goal.
Wouldn't this depend on how much debt a person is in?
If you gave someone a raise but they were still deep in debt, the raise wouldn't be enough to cover the growing costs of having a large loan loom over your finances. In this case it would be more effective to pay off the loan if you value said worker keeping more of their money.
Plus not all public servants are facing debt, which means that the people with debt are going to gain less benefit from an overall raise.
Do you have a good reference showing which restrictions came from Congress and which ones the Education Department is adding on? And whether those added restrictions come from some discretion that Congress authorized, or are simply illegal?
Even if you have a point, your comment is off-putting and it sounds like you're demanding someone cater to your specific use case. Maybe offer a better solution if you want your comment to be constructive rather than whiny.
EDIT: I also just checked this comment in the iOS app as well as a mobile browser and it looked completely fine. So, again, offer up a solution or provide details of your device so others can inform on how to fix this.
In response to an inquiry from Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of Dec. 28 under the new program. Most of those, 28,640 people, were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program.
Of the 9,820 applicants who cleared the first hurdle, 1,184 are still under consideration. The rest were rejected for myriad reasons. Of the applicants who cleared the initial hurdle, 40% still had years to go before hitting the required 10-year mark. Nearly a quarter were ineligible because they were paying less money in the wrong payment plan than they would have in the correct one.
Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program. Some had not made enough on-time payments or had not had at least 10 years of full-time employment certified by a qualifying employer, according to the department.
I would have done this myself but I was on mobile at the time. As for devices, the fixed width quoting requires horizontal scrolling on both the iPhone SE and iPhone 6.
People aren't qualifying because, as the article points out, the requirements for the program are absurd. It's really apparent when you look at how little student debt has been forgiven compared to the amount allocated for the program.
For one, it’s been reported that a single late payment by a day kicks you out of eligibility. The requirements are designed with the intention that people will fail.
One example is that They told people 10 years ago that the job they were working qualified and they got letters each year saying all good and then changed their mind about the job qualifying. So now these people are screwed.
> A Qualifying employer includes the government, a notfor-profit organization that is tax-exempt under Section
501(c)(3) of the Internal Revenue Code, or a private not-forprofit organization that provides certain public services.
and it goes on to give definitions of "government" and "not for profit" orgs.
In a 54-page opinion, U.S. District Judge Timothy J. Kelly said changes to the eligibility requirements, made several years after the program began, were “arbitrary and capricious.” Kelly called one of the Education Department’s main arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument.
Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.
Here’s another example but it’s about being in the wrong loan program or repayment plan. But the fact pattern is similar. The servicers and the dept of Ed did a bad job implementing this program.
“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness.
"They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”
From personal experience, I can tell you the requirement referenced in this snippet feels absurd:
“Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program.”
Federal loan? Check. Working for a 503c? Check. Oh, wait — the type of federal loan you took out is the wrong kind. So you need to consolidate under this other kind. And yeah, it resets it such that none of the payments you made for the past 10 years count.
I’m lucky enough that it personally doesn’t really matter to me. I took on the loans for my education when the foregiveness program wasn’t in existence so I certainly wasn’t banking on a bailout. But the FFELP was still in existence when this program was being developed so I have no idea why those loans weren’t included.
The government pays for PSLF, in part, through revenues brought in through federal loan programs. Why would PSLF apply to loans where a private lender is getting the interest payments?
At the face level none of the individual requirements are absurd. That said, to meet all of their specific criteria is quite the challenge. Just take a look at the actual requirements. [0]
I work in local government and personally know dedicated public servants who would stand to benefit from this program but none of them qualify.
It’s 5 requirements man. Are you seriously trying to say that: (1) working for the government (2) full time (3) with loans taken out under a Direct loan from the government (4) and making payments on an income based repayment plan for your loans (5) for 120 months is that hard?
I think y'all may be getting confused because this reads like bureaucratic gobbledygook.
So let me try to make it clear: The main requirement they are failing is never having asked for loan foregiveness before
That is, they are applying to a program meant to help those who do not qualify for loan foregiveness, but have not bothered to ask for loan foregiveness in the first place.
As for "really apparent when you look at how little student debt has been forgiven" - you really don't want to measure the effectiveness of this kind of program based on how much money it gave out.
A lot of programs that successfully give out all the money do so due to fraud.
I'm not arguing it is per-se bad (It is impossible to run programs at that scale without some fraud rate. Medicare's fraud rate is 8-10%)
i'm arguing all you would do by forcing them to give the money out is increase the fraud rate - they will do less investigation of claims because they don't have to.
Worse, claims that look better on their face will be approved even if they push aside claims that aren't fraudulent.
It seemed strange that there's a "request for forgiveness" and an "application for forgiveness". But hey, having to fill out two forms seems like pretty typical government work.
> Neither the 120 qualifying payments nor employment have to be consecutive.
Do you know if any of the tens of thousands rejected were rejected because they made a single late payment as some are claiming? The text on the form does not make that a disqualifier. It would seem to be important to clarify whether the form is incorrect as pertains to the law, or if none of the claims made are true that a single, or even a sequence of, late payments scuttled eligibility for someone.
Thank you for quoting the form. It’s 120 full on-time payments completed in no less than 10 years. You can miss payments. But your loan must not be in default.
Yes, the many people claiming that a single missed payment will disqualify you are factually incorrect.
The lenders take huge profits as interest, supposedly as payment for the risk that they are taking on.
It's an outrage because if so few people are able to default on the loans, the lenders are not taking on any risk at all, and are in fact functioning more as a kind of mafia style protection racket.
I started law school shortly after the PSLF program was created. The program created a loan forgiveness option after 10 years of qualifying public service. The criteria for qualification are clearly specified up front. Among other things, you need to make 120 monthly payments on a qualifying income-driven repayment plan. None of these criteria are arbitrary or hard to understand.
Nonetheless, because so many people couldn't figure it out, Congress allocated an additional $700 million to help those folks. But, as far as I can tell from the article, the people being denied are the ones who still can't figure it out. 28,640 of the 38,640 had not previously applied for loan forgiveness. Of course those people must be rejected--this $700 million is a supplemental program for people who goofed up and got rejected from the regular PSLF. It would make no sense to let people get money from that program before they were rejected from regular PSLF. The other reasons for rejection are even more meritorious. If you haven't been paying for 10 years, or were paying less on your incorrect plan than you would have under the PSLF plan, you shouldn't get loan forgiveness--you haven't paid in what you were supposed to. Likewise, the federal government cannot do anything about private student loans. It goes without saying that people who don't have 10 years in a qualifying public-service job shouldn't get forgiveness. Literally every reason mentioned in the article for rejecting these applications are good reasons for rejecting these applications.
OK so let's back up and look at this from a higher level.
A program that is supposed to help 10s of thousands of students ends up helping very few. Does this mean that all the rejected people are lazy, stupid, or grifters? Or is the program implemented poorly?
This is not a welfare program for needy people. It’s a transactional arrangement with specific terms for college and graduate-school educated people. The government should be able to expect that the applicants will be able to dot their Is and cross their Ts.
Why are there any Is to dot and Ts to cross at all? Why isn't the application:
Name: _________________
Taxpayer ID: __________
? The government should be able to figure out from that what government loans you have that are eligible for the program, and if you've satisfied ongoing payment requirements. They should be able to figure out from your income tax returns if you are working in a qualifying public service job.
As it turns out, random government agencies can’t just data mine your tax returns, bank accounts, and payment history from a third party servicer.
To build the infrastructure to do this would cost the government probably $100 billion. See healthcare.gov for an example where they tried to do something similar.
... Look outside the US. This is how a lot of social programs work. Especially if it were for a Public Servant/Employee then the records are even easier to access.
Perhaps the US’s relative state independence doesn’t help it here.
Healthcare.gov was insanely successful after the initial poor launch (the initial launch was poor only because the Supreme Court struck down certain aspects of the law, which meant that the entire scope of healthcare.gov changed overnight).
I haven’t used PSLF, but the IBr system does in fact do stuff like pull your income and loan information from the relevant government data bases when you certify your income each year.
The issue here is not filling in the forms properly, but people failing to look carefully at the underlying requirements for eligibility and make sure they meet them.
Spoken like someone who has never found themselves in the insane loops that a bureaucracy can throw you into, with contradictory news coming from multiple parties.
You blame the students for a program which was designed to give away 700 million, but instead gave away a 70th of that - while rejecting 97-99% of applicants so far?
This at a time when at least 1.5 trillion of tax cuts for the wealthy have been given (about 140,000 times more money than what was actually paid, or "only" 2,000 times more than what was supposed to go).
The vast majority of the people who "can't figure it out" are employed by the Department of Education or by FedLoan Servicing. I am employed by the U.S. government, recertify for an eligible repayment plan every year, am enrolled in autopay, and still get told that I've only made 9-10 qualifying payments in a year-long period. I often have to spend hours on the phone, across several months, arguing and documenting, just to set the record straight.
Just curious, have you ever heard of lodge practice?
It was a huge source of medical care for the poor and working class well into the early 1900 (serving ~1/3 of the population), but was strangled by the AMA and the centralization of unions:
http://www.freenation.org/a/f12l3.html
I think it’s particuarly interesting because it was completely absent from all my previous education about medical systems. I only recently learned it existed, and it’s changed my views significantly. (I.e. I’m no longer of the opinion that switching to full government management is a good target, but rather, the government should stop propping up and providing corporate welfare to the systems which strangled mutual aid societies.)
Good to hear! Here’s also a fascinating news clipping from a 1910 issue of the New York Times. It really helps to get a feel for the rhetoric of the era, “Physician Condemns Practice for Lodges”:
https://timesmachine.nytimes.com/timesmachine/1910/11/06/105...
I was at the post office the other day to get passports for the family. It turns out that they had a signup sheet with only 25 spots on it for the whole day. I got there 13 minutes after they opened and I was 21st on the list. I waited for 3 hours just to be able to hand in the paperwork. I didn't walk out with a passport, just handed them the paperwork.
And no, if you have a kid under 10 with you, you can't do it online. You have to show up in person with both parents.
Funny, we just did the same with our two kids. We called the post office and they encouraged us to make an appointment, which we did. We showed up on time, and waited less than 5 minutes. They walked us through completing the paperwork and had us out in minutes. A couple weeks later (yesterday) the passports arrived.
That's a better job than Comcast or Blue Cross ever did for me.
It's almost as if, the federal government is a vast machine with a few malfunctioning parts which doesn't mean its bad as a whole, over generalization of its specific shortcomings being unproductive. Its almost as if...we need to improve it instead of bitching about how we don't need it
Meanwhile, the US has worse and far more expensive healthcare than all of those "socialist" European and Asian countries. But don't let the facts get in the way of your opinions.
Imagine if the only way to get a court to hear your plea were to file the correct form of action. Depending on what you want the court to do, you might have to file a different form, and you also have to know which court to petition. As you probably know, courts following the English law tradition have simplified their forms of action (say, [0]) so that this task is much easier now than it used to be.
A common problem with this sort of program is that the bureaucratic requirements end up preventing people from successfully applying or completing paperwork which they didn't know that they needed to handle. While this might seem like a mere UX problem to you, or perhaps "a formality", I assure you that it can and does drive people mad. [1]
And the other side also likes to have that red tape so they can hire more administrators and burn through the money that was supposed to actually help people.
The thing is both parties are involved in most of the red tape in everything. In general, I'm opposed to most state sponsored charity, I'd much rather it were mostly voluntary or unilaterally applied. This includes corporate charity and I'd also like to see IP law rolled back a bit.
That's just my own POV, which really doesn't align with either D or R a lot of the time.
Just because each step might be a valid reason, does not make the steps as a whole valid.
I'm doing to draw an example to hiring in the tech industry for example. It's fair to have a phone interview for a job position, I think we could all agree on that. The same goes for a phone interview plus an in-person.
Now let's start adding more steps into the mix. Let's say you need a phone interview, followed by a small side project, another phone interview, a timed test, then multiple days of in-person interviews, followed by another phone interview and ending with a final vocal offer (which if you don't say the right salary might be rescinded).
Are each of these steps valid in itself? Sure. But every time you add an additional step, you end up shedding a lot of individuals. Some that might be actually pretty good hires, but made a small mistake that got them filtered out early. The end result is the company has trouble finding 'the right candidate' and a position ends up open for months.
It's the exact same idea here. The government has added so many steps and gotcha moments that all it takes is one small mistake to get denied.
Yes, if you have a good reason to reject a loan forgiveness application, you should reject it.
I don't even agree with the concept of outright forgiveness of a loan without collateral without some genuine settlement; but surely a program like this needs some standards even if you don't disagree with the basic concept.
It comes down to what the goal was of the program. Was it to issue $700MM and incentivize people to go into public service? If so then it really did fail if they only managed to dole out $10MM or so.
I would think the end goal would be that the program could say "Hey you gave us $700 MM and we managed to get all these public servants in it and on track".
$700 million funding for this secondary phase program.
Only 262 applicants had success; 38,198 no success.
So program costs 2.67 million per successful applicant. With loans between a few thousand and a quarter million dollars. Let's say $40,000 on average, which is 10.5 million for all of them spent, and the remaining $690 million is thus the administrative overhead.
People OK with this seem to believe the $690 million in administrative overhead is money well spent and the $10.5 million spent on actual loan payouts is nearly an extravagance.
There's a not-insignificant school of thought in American politics that it is vastly more important to prevent people from getting benefits who are not ideal recipients than it is to make sure people who should get benefits do.
This spending ratio is in line with those priorities.
Where on earth did you get that? $700 million is a pot of money available to help out those who didn’t properly qualify for the PSLF program. The rejected a bunch of applications (surprise, people who couldn’t figure out the instructions the first time couldn’t figure them out the second time). Nothing in the article suggests they spent the rest of the money.
Rayiner has asserted with authority that you can’t possibly end up in that situation if you and your wife have even basic reading comprehension skills once, let alone 7 times.
Can you provide examples of these ridiculous reasons so we can either conclude that the two of you are indeed invalids, or so he can re-evaluate his assumptions and perhaps stop denigrating folks like yourself?
He could have put it in a nicer way, but I do think it did a good job explaining how a particular chunk of anecdotal information could be very helpful to the conversation.
Many of the above comments about how these people deserve to be rejected also come off as pretty unkind.
Are you kidding? That’s what passes for confrontational now? You kids, I tell ya ;)
It was very slightly snarky perhaps, but appropriate to make a point. Maybe it’s better to hold off on the assumptions that everyone else must just be idiots. I’m fine with someone deciding that they are indeed idiots, but at least ask some questions and get their side first before declaring them so to the whole internet. Shit is rarely as simple as it might seem to an outsider. I doubt anyone who can manage to register for HN could fuck up the forgiveness application 7 times if the process was truly as simple as claimed.
This acts as an "employment benefit" for the government, like health insurance, paid vacation, and free lunch. Whether or not it's better than just paying people more is debatable - but you can say the same things about health insurance, paid vacation, and free lunch.
It's a little more complicated than employer-sponsored lunch because it applies to a variety of employers, not just the US government. And it targets a particular demographic (recent college graduates). But fundamentally it's (supposed to be) one more thing that humans factor into the decision of what sort of career to take.
There are reasonable arguments for and against the program, but soundbites like "they get to pay their debts like anyone else" do not really add to the conversation constructively.
...I can't even. Why not take a Byzantinely complex situation with a major flaw even more complex, instead of using a socially acceptable, simple solution that revolutionized human society for the better? I guess politicians have to put "plans" to their name, cant use something NIH
Do they even need this sort of education? Considering "higher education" is a form of signaling and a discrimination mechanism for enterprises, not a valid way to get educated, the public sector should not be the one to take the lead in it.
I say this as someone who has a lot of money on the line; I have been in an income based repayment plan for about nine years, work for a local government, have a Direct Loan, etc., etc.
We'll see how the program still stands when I'm actually eligible to apply in October 2020...
>In a 54-page opinion, U.S. District Judge Timothy J. Kelly said changes to the eligibility requirements, made several years after the program began, were “arbitrary and capricious.” Kelly called one of the Education Department’s main arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument.
>Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.
>Here’s another example but it’s about being in the wrong loan program or repayment plan. But the fact pattern is similar. The servicers and the dept of Ed did a bad job implementing this program.
>“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness. "They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”
The fact that there is a need for such a program in the first place makes me uncomfortable. How bad has the student debt gotten to warrant such programs?
I don't blame student debt wholly for this, the second factor is that public sector jobs are somewhere between 1/2 to 2/3 of a private sector salary. There is also general hostility to match private sector salary with public funds (for many reasons) and the math just doesn't line up. This forgiveness program makes sense for some of the silliness of government funding and budget allocation but it doesn't make common sense. It also makes sense if salary is lower that you get some benefit for the fact you can't pay down loans aggressively to minimize the impact of interest.
I would also indicate that I feel like it's disingenuous to compare forgiveness programs of bachelors education compared to specialists like lawyers and PhD types where even state schools put you in the 80k+ club.
It could be other way around. Such programs encourage making education/healthcare prices absurdly high as they guarantee the return without any responsibility from the colleges/hospitals/banks/loaners, etc.
Public education? This program probably screwed towards students in private universities, if anything. Higher tuition would mean more students have loans, and larger loans.
Huh, isn't at all like the stop-loss payment program they had for military personnel.
They sent a bunch of letters which I ignored because (I thought) I didn't qualify until the last one with "Final Notice" so I figured why not? A while later they sent me a check for something like $2,600 -- they were literally begging me to take their money.
120 comments
[ 2.5 ms ] story [ 206 ms ] threadIt clearly says you need to have had the loan for 10 years and been paying on time payments and have a stable job. Those requirements don't seem absurd, outlandish, nor designed to make people fail.
If you don't meet those minimum of requirements, why would the tax payer want to forgive your debts - you clearly didn't hold your end of the bargain, yet want to be released of potentially thousands or tens of thousands of dollars of public-money debt.
Or talked with customer support agents for the program that who told my wife that a formal loan forgiveness application was not required, and would be a waste of time. Just meet the criteria and apply when your 10 years were up.
But what those criteria were was not described clearly enough to make 10 year plans on. And the general confusion was so massive, the program so obviously a shambles, that we decided there was little chance that the program would survive, and passed on it.
The point still stands, however. For a program as controversial as this (loan forgiveness in general, that is), it's amazing there's any program at all.
Those wishing to be granted forgiveness have a clear list of requirements they need to meet in order to be considered - yet the article wants me to be outraged at the current administration because so few people that applied bothered to even read the requirements.
Effectively, every dime you put down towards interest on a federal loan is money that could've been spent towards things that benefit the market. If you were to take a pure free market approach, federal student loans are theoretically a Very Bad Thing and it should be in the government's interest to reduce those.
If you gave someone a raise but they were still deep in debt, the raise wouldn't be enough to cover the growing costs of having a large loan loom over your finances. In this case it would be more effective to pay off the loan if you value said worker keeping more of their money.
Plus not all public servants are facing debt, which means that the people with debt are going to gain less benefit from an overall raise.
EDIT: I also just checked this comment in the iOS app as well as a mobile browser and it looked completely fine. So, again, offer up a solution or provide details of your device so others can inform on how to fix this.
In response to an inquiry from Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of Dec. 28 under the new program. Most of those, 28,640 people, were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program.
Of the 9,820 applicants who cleared the first hurdle, 1,184 are still under consideration. The rest were rejected for myriad reasons. Of the applicants who cleared the initial hurdle, 40% still had years to go before hitting the required 10-year mark. Nearly a quarter were ineligible because they were paying less money in the wrong payment plan than they would have in the correct one.
Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program. Some had not made enough on-time payments or had not had at least 10 years of full-time employment certified by a qualifying employer, according to the department.
I would have done this myself but I was on mobile at the time. As for devices, the fixed width quoting requires horizontal scrolling on both the iPhone SE and iPhone 6.
> A Qualifying employer includes the government, a notfor-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or a private not-forprofit organization that provides certain public services.
and it goes on to give definitions of "government" and "not for profit" orgs.
Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.
https://www.americanbar.org/news/abanews/aba-news-archives/2...
“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness. "They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”
https://www.cnbc.com/2018/12/18/borrowers-denied-public-serv...
“Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program.”
Federal loan? Check. Working for a 503c? Check. Oh, wait — the type of federal loan you took out is the wrong kind. So you need to consolidate under this other kind. And yeah, it resets it such that none of the payments you made for the past 10 years count.
I’m lucky enough that it personally doesn’t really matter to me. I took on the loans for my education when the foregiveness program wasn’t in existence so I certainly wasn’t banking on a bailout. But the FFELP was still in existence when this program was being developed so I have no idea why those loans weren’t included.
I work in local government and personally know dedicated public servants who would stand to benefit from this program but none of them qualify.
[0] https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell...
I meet 4 of these 5 requirements by accident.
So let me try to make it clear: The main requirement they are failing is never having asked for loan foregiveness before
That is, they are applying to a program meant to help those who do not qualify for loan foregiveness, but have not bothered to ask for loan foregiveness in the first place.
As for "really apparent when you look at how little student debt has been forgiven" - you really don't want to measure the effectiveness of this kind of program based on how much money it gave out.
A lot of programs that successfully give out all the money do so due to fraud.
Name 3, with citations.
I'm not arguing it is per-se bad (It is impossible to run programs at that scale without some fraud rate. Medicare's fraud rate is 8-10%)
i'm arguing all you would do by forcing them to give the money out is increase the fraud rate - they will do less investigation of claims because they don't have to.
Worse, claims that look better on their face will be approved even if they push aside claims that aren't fraudulent.
This happens in medicare/medicaid all the time, see https://en.wikipedia.org/wiki/Medicare_fraud
You can also see this happened in pigford vs glickman, etc.
Isn't that then the fault of 1) the people who wrote the law and 2) the people who incorrectly told these applicants they were eligible?
Here's the form. It pretty straightforwardly specifies 120 on-time payments to school loans. https://studentaid.ed.gov/sa/sites/default/files/public-serv...
I wonder where all these people are coming from, that are just misapplying for student loan forgiveness.
It states:
> Neither the 120 qualifying payments nor employment have to be consecutive.
Do you know if any of the tens of thousands rejected were rejected because they made a single late payment as some are claiming? The text on the form does not make that a disqualifier. It would seem to be important to clarify whether the form is incorrect as pertains to the law, or if none of the claims made are true that a single, or even a sequence of, late payments scuttled eligibility for someone.
Yes, the many people claiming that a single missed payment will disqualify you are factually incorrect.
It's an outrage because if so few people are able to default on the loans, the lenders are not taking on any risk at all, and are in fact functioning more as a kind of mafia style protection racket.
Nonetheless, because so many people couldn't figure it out, Congress allocated an additional $700 million to help those folks. But, as far as I can tell from the article, the people being denied are the ones who still can't figure it out. 28,640 of the 38,640 had not previously applied for loan forgiveness. Of course those people must be rejected--this $700 million is a supplemental program for people who goofed up and got rejected from the regular PSLF. It would make no sense to let people get money from that program before they were rejected from regular PSLF. The other reasons for rejection are even more meritorious. If you haven't been paying for 10 years, or were paying less on your incorrect plan than you would have under the PSLF plan, you shouldn't get loan forgiveness--you haven't paid in what you were supposed to. Likewise, the federal government cannot do anything about private student loans. It goes without saying that people who don't have 10 years in a qualifying public-service job shouldn't get forgiveness. Literally every reason mentioned in the article for rejecting these applications are good reasons for rejecting these applications.
The "supplemental PSLF" is: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell...
A program that is supposed to help 10s of thousands of students ends up helping very few. Does this mean that all the rejected people are lazy, stupid, or grifters? Or is the program implemented poorly?
To build the infrastructure to do this would cost the government probably $100 billion. See healthcare.gov for an example where they tried to do something similar.
Perhaps the US’s relative state independence doesn’t help it here.
The issue here is not filling in the forms properly, but people failing to look carefully at the underlying requirements for eligibility and make sure they meet them.
This is the US, after all. Wealth is morality, and all that.
This at a time when at least 1.5 trillion of tax cuts for the wealthy have been given (about 140,000 times more money than what was actually paid, or "only" 2,000 times more than what was supposed to go).
Staggering. What kind of mindset allows for this?
Welcome to the federal government.
It was a huge source of medical care for the poor and working class well into the early 1900 (serving ~1/3 of the population), but was strangled by the AMA and the centralization of unions: http://www.freenation.org/a/f12l3.html
I think it’s particuarly interesting because it was completely absent from all my previous education about medical systems. I only recently learned it existed, and it’s changed my views significantly. (I.e. I’m no longer of the opinion that switching to full government management is a good target, but rather, the government should stop propping up and providing corporate welfare to the systems which strangled mutual aid societies.)
And no, if you have a kid under 10 with you, you can't do it online. You have to show up in person with both parents.
That's a better job than Comcast or Blue Cross ever did for me.
Imagine if the only way to get a court to hear your plea were to file the correct form of action. Depending on what you want the court to do, you might have to file a different form, and you also have to know which court to petition. As you probably know, courts following the English law tradition have simplified their forms of action (say, [0]) so that this task is much easier now than it used to be.
A common problem with this sort of program is that the bureaucratic requirements end up preventing people from successfully applying or completing paperwork which they didn't know that they needed to handle. While this might seem like a mere UX problem to you, or perhaps "a formality", I assure you that it can and does drive people mad. [1]
[0] https://www.law.cornell.edu/rules/frcp/rule_2
[1] https://www.youtube.com/watch?v=JtEkUmYecnk
That's just my own POV, which really doesn't align with either D or R a lot of the time.
I'm doing to draw an example to hiring in the tech industry for example. It's fair to have a phone interview for a job position, I think we could all agree on that. The same goes for a phone interview plus an in-person.
Now let's start adding more steps into the mix. Let's say you need a phone interview, followed by a small side project, another phone interview, a timed test, then multiple days of in-person interviews, followed by another phone interview and ending with a final vocal offer (which if you don't say the right salary might be rescinded).
Are each of these steps valid in itself? Sure. But every time you add an additional step, you end up shedding a lot of individuals. Some that might be actually pretty good hires, but made a small mistake that got them filtered out early. The end result is the company has trouble finding 'the right candidate' and a position ends up open for months.
It's the exact same idea here. The government has added so many steps and gotcha moments that all it takes is one small mistake to get denied.
I don't even agree with the concept of outright forgiveness of a loan without collateral without some genuine settlement; but surely a program like this needs some standards even if you don't disagree with the basic concept.
I would think the end goal would be that the program could say "Hey you gave us $700 MM and we managed to get all these public servants in it and on track".
$700 million funding for this secondary phase program.
Only 262 applicants had success; 38,198 no success.
So program costs 2.67 million per successful applicant. With loans between a few thousand and a quarter million dollars. Let's say $40,000 on average, which is 10.5 million for all of them spent, and the remaining $690 million is thus the administrative overhead.
People OK with this seem to believe the $690 million in administrative overhead is money well spent and the $10.5 million spent on actual loan payouts is nearly an extravagance.
Interesting.
This spending ratio is in line with those priorities.
Can you provide examples of these ridiculous reasons so we can either conclude that the two of you are indeed invalids, or so he can re-evaluate his assumptions and perhaps stop denigrating folks like yourself?
Many of the above comments about how these people deserve to be rejected also come off as pretty unkind.
It was very slightly snarky perhaps, but appropriate to make a point. Maybe it’s better to hold off on the assumptions that everyone else must just be idiots. I’m fine with someone deciding that they are indeed idiots, but at least ask some questions and get their side first before declaring them so to the whole internet. Shit is rarely as simple as it might seem to an outsider. I doubt anyone who can manage to register for HN could fuck up the forgiveness application 7 times if the process was truly as simple as claimed.
It's a little more complicated than employer-sponsored lunch because it applies to a variety of employers, not just the US government. And it targets a particular demographic (recent college graduates). But fundamentally it's (supposed to be) one more thing that humans factor into the decision of what sort of career to take.
There are reasonable arguments for and against the program, but soundbites like "they get to pay their debts like anyone else" do not really add to the conversation constructively.
https://www.forbes.com/sites/robertfarrington/2019/01/22/why...
I say this as someone who has a lot of money on the line; I have been in an income based repayment plan for about nine years, work for a local government, have a Direct Loan, etc., etc.
We'll see how the program still stands when I'm actually eligible to apply in October 2020...
https://www.americanbar.org/news/abanews/aba-news-archives/2...
>In a 54-page opinion, U.S. District Judge Timothy J. Kelly said changes to the eligibility requirements, made several years after the program began, were “arbitrary and capricious.” Kelly called one of the Education Department’s main arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument.
>Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.
https://www.cnbc.com/2018/12/18/borrowers-denied-public-serv...
>Here’s another example but it’s about being in the wrong loan program or repayment plan. But the fact pattern is similar. The servicers and the dept of Ed did a bad job implementing this program.
>“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness. "They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”
I would also indicate that I feel like it's disingenuous to compare forgiveness programs of bachelors education compared to specialists like lawyers and PhD types where even state schools put you in the 80k+ club.
The article explains the reasons for the rejections. It's pretty clear that rules were established and are being followed.
They sent a bunch of letters which I ignored because (I thought) I didn't qualify until the last one with "Final Notice" so I figured why not? A while later they sent me a check for something like $2,600 -- they were literally begging me to take their money.