If you haven’t heard of the Public Service Loan Forgiveness program, that’s okay. It was created a decade ago for people who work for the government or for a non-profit. The purpose of the program was to allow these workers to clear out their student debts if they had on-time monthly payments for ten years. Well, it has been ten years, and these workers have patiently awaited the day for their loan forgiveness. In fact, roughly 500,000 people applied to the program.
And of course, there is now a lawsuit filed by the Department of Education alleging that the program hasn’t kicked in yet because the applications were merely received, not necessarily processed. Without final action on the applications, they may not be applied — but we will have to see how the lawsuit proceeds.
According to the argument, only after the 120 payments are made by the workers (12 monthly payments a year for ten years) should they have applied for the Public Service Loan Forgiveness program. It will be interesting to see what happens from here.
As we have written about before, it is basically impossible to get your student debt eliminated via bankruptcy. With the PSLF program in limbo, there could be even fewer ways for this debt to be eliminated.
What a bankruptcy filing can do, though, is eliminate other debts that you have so that you can concentrate your finances on your student debt. If you are considering bankruptcy, get in touch with an attorney.
Source: NPR, “New Fears For Public Service Loan Forgiveness,” Anya Kamenetz, Aug. 2, 2017