Student Loan Debt

Ask Matt: Does student loan forgiveness work?

Blue piggy bank with graduation cap

From Matt:

When you hear anything about student loan forgiveness, it almost always refers to the Public Service Loan Forgiveness (PSLF) program. When this program began in 2007, the federal government implemented many confusing rules and guidelines around who was eligible to qualify. Here’s what you need to know about qualified payments.

  • You must work full time for at least 10 years at a qualifying employer (like a public school).
  • You must have the right kind of federal loan, such as a Direct Loan.
  • You must be on the right type of payment plan, such as an income-driven repayment plan.
  • Payments made when not working for a qualified employer do not count toward your 120 required payments.
  • Extra payments do not count toward your 120 required payments.

Here’s why people think PSLF doesn’t work: You can only apply for PSLF after you make 120 qualified student loan payments. Due to the confusion on the rules for this program, many people haven’t made enough qualified payments when they apply for PSLF, hence the “it doesn’t work” hearsay. Myth busted. Since 2007, the number of people who have made 120 qualified student loan payments is increasing and will only continue to grow. So you might even start hearing the “it doesn’t work” myth a little less. If you see an article that states 99% of people who have applied for PSLF have been denied, that isn’t telling the whole story. From the second to the third quarter of 2019, the number of people who were approved has tripled!1 PSLF does work! Still not sure if you're on the right path to PSLF? Here is more information on the Horace Mann's Student Loan Solutions program.

1https://www.fool.com/research/student-loan-debt-statistics/ The information provided here is for general informational purposes only and should not be considered an individualized recommendation. Horace Mann is a private company not affiliated with the Department of Education or the federal government. Horace Mann does not negotiate, adjust or settle debts. No assistance provided by Horace Mann constitutes official action for purposes of the PSLF program or guaranteed results.