The U.S. Department of Education has made improvements in the application forms for two of the most popular student loan forgiveness programs.
Unfortunately, there haven’t been any significant improvements in the approval rates.
The improvements affect the Borrower Defense to Repayment Application and Public Service Loan Forgiveness (PSLF) Help Tool and application.
Borrower Defense to Repayment Application
The Borrower Defense to Repayment Application has been integrated into the StudentAid.gov web site as a smart form.
The smart form uses information on the borrower’s college and enrollment dates to help the borrower submit a borrower defense to repayment application.
The new form is a little more user-friendly than the old form.
The status of your borrower defense to repayment application can be seen in the dashboard on the StudentAid.gov site after you login.
Many Borrower Defense to Repayment Applications Have Been Denied
As of September 30, 2020, only 61,511 (18%) of the 333,596 borrower defense to repayment applications have been approved. 131,539 (39%) of the applications have been denied. Most of the remaining applications are still pending.
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A total of $563,042,260 has been discharged, an average of $9,154 per approved application. Slightly less than half (45.3%) of approved applications have received a partial discharge.
Public Service Loan Forgiveness Help Tool
The Public Service Loan Forgiveness (PSLF) Help Tool includes an employer eligibility database, to help borrowers determine whether or not their employer is eligible for public service loan forgiveness.
Borrowers must provide their employer’s Federal Employer Identification Number (EIN) and dates of employment to search the employer database, which currently has more than 1.5 million employers.
The PSLF Help Tool can now report on the number of qualifying payments you have made.
The PSLF Help Tool will also tell you if your federal student loans or repayment plan are not eligible, and how to fix this.
New Single PSLF and TEPSLF Application Form
In addition to the enhancements to the PSLF Help Tool, the U.S. Department of Education has launched a single combined application form for Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF). This application form can be used to certify qualifying employment and to apply for loan forgiveness.
The combined form should eliminate problems where borrowers incorrectly used the application form for employment certification. It also fixes the bureaucratic nightmare where borrowers who were applying for TEPSLF had to first apply for PSLF and have the PSLF application rejected.
Borrowers will receive qualifying payment counts every time they submit the new form.
Few PSLF Applications Have Been Approved
As of September 30, 2020, only 3,469 (1.9%) of 179,371 unique borrowers applying for Public Service Loan Forgiveness (PSLF) have had an application approved. A total of $260,487,126 has been discharged, an average of $75,090 per borrower.
An additional 2,031 (1.1%) borrowers have had an application approved for discharge under Temporary Expanded Public Service Loan Forgiveness (TEPSLF). A total of $87,448,286 has been discharged, an average of $43,057 per borrower. Very few TEPSLF applications were processed in September 2020.
Thus, overall, only 3.0% of borrowers applying for PSLF or TEPSLF have had their loans discharged.
More than 1.3 million borrowers have filed at least one eligible Employment Certification Form (ECF). The most common reason for an ineligible ECF is missing information on the form (83%).
The most common reasons for PSLF denials have included the number of qualifying payments (56%), missing information (25%) and no eligible loans (14%).
The most common reasons for TEPSLF denials have included borrower in repayment for less than 10 years (30%), borrower did not satisfy the requirements for payments made in the last 12 months (19%) and borrower has not made 120 qualifying payments (17%).
Of the borrowers qualifying for TEPSLF, 65% were in an income-driven repayment plan, 16% in graduated repayment, 13% in extended repayment and 6% in standard repayment.