Struggling veterans encounter bureaucratic obstacles in their attempts to have their student loans forgiven, as previously pledged
Struggles Persist for Military Borrowers Seeking Student Loan Forgiveness
Veterans and active-duty service members are facing challenges in qualifying for the Public Service Loan Forgiveness (PSLF) program, designed to erase student debt for those in public service jobs.
To qualify, veterans must provide proof of their military service, primarily through military service records or discharge papers such as the DD Form 214. Additionally, they need to show that they worked in a qualifying public service job while making qualifying payments on eligible federal student loans. Proof of employment in a government or nonprofit organization and certification of employment by the employer are required.
Jodie Parks, an occupational therapist working at a Michigan state psychiatric hospital, is one such veteran. She spends four hours a week trying to prove her military service for the PSLF program. Parks, who has about $48,000 in student loans, has been having trouble getting her employment certification form signed by the Air Force.
Mike Smiley, a pediatric pulmonologist, has also faced difficulties. He has spent many hours trying to get military sign-off for and answers about the loan forgiveness he believed he’d earned. FedLoan, the servicer for Smiley's loans, rejected his DD 214 and a letter from the Navy's personnel command verifying his service.
These struggles are not unique. Navy veteran Stacy Hunter, 46, has had her seven years of Navy service, during which her loan payments were deferred, not counted toward her 120 payments for Public Service Loan Forgiveness. Fewer than 2% of applicants were approved between 2017 and the onset of Covid-19.
However, there is some hope on the horizon. The Department of Education is collaborating with advocates to draft new permanent regulations designed to help more borrowers qualify after the waiver expires in October. The Department is also making improvements to help military borrowers qualify for PSLF.
In October, the Department of Education announced that months spent on active duty count toward Public Service Loan Forgiveness, even if the service member's loan payments were in deferment. This decision led to a 40% spike in forgiveness applications. About 1,500 military borrowers have had their loans forgiven under the waiver since October.
The Biden administration temporarily loosened the program’s rules for one year to give more borrowers the chance to qualify. The Department of Education is also working with the Department of Defense to set up a system that would automatically match data across the two agencies, which could end borrowers’ hours on the phone seeking signatures.
After several weeks of concern that his paperwork had gotten lost, Mike Smiley's loan forgiveness was approved on March 22.
For the most accurate and personalized guidance, veterans should consult the official PSLF resources provided by the U.S. Department of Education and confirm their loan and employment status through the PSLF servicer, as well as ensure all documentation meets current federal requirements.
[1] For certain military-related forgiveness provisions, documentation of service in specific conditions, such as serving in imminent danger areas, may be required. [3] Source: U.S. Department of Education
- The struggles faced by military borrowers seeking loan forgiveness through the Public Service Loan Forgiveness (PSLF) program are not exclusive to Jodie Parks and Mike Smiley, as Navy veteran Stacy Hunter's seven years of Navy service did not count towards her PSLF eligibility.
- Critical improvements for military borrowers to qualify for PSLF are being made, with the Department of Education collaborating with advocates to draft new permanent regulations that will help more borrowers after the waiver expires in October.
- In a move that could potentially end hours on the phone seeking signatures, the Department of Education is working with the Department of Defense to set up a system that would automatically match data across the two agencies.
- Despite challenges in qualifying for PSLF, the Biden administration temporarily loosened the program’s rules for one year to give more borrowers the chance to qualify, leading to a 40% spike in forgiveness applications.
- The lifestyle of military service members can impact their eligibility for certain forgiveness provisions, as documentation of service in specific conditions, such as serving in imminent danger areas, may be required.
