This fall, for the first time ever, borrowers who have made 120 qualifying payments can avail themselves of the Public Service Loan Forgiveness program (PSLF) to eliminate their remaining federal student loan debt. Ahead of its implementation, we’ve drafted some recommendations to ensure smooth sailing and a better, more targeted program. This post, detailing recommendations for borrowers and those who wish to help conduct outreach to them, is the second in a three-part series on PSLF. Check out the first post for recommendations to the Department of Education, and the third post for recommendations to Congress.
In our earlier post, we described opportunities to improve the Public Service Loan Forgiveness for the Department of Education. But even with more than 600,000 borrowers having submitted approved Employment Certification Forms, significant on-the-ground work remains to ensure the borrowers most in need of the forgiveness are aware of its existence. At the same time, borrowers hoping to take advantage of the program need to be well-aware of the requirements and ensure adequate documentation of their eligibility. These recommendations are designed both for borrowers hoping to take advantage of the program, and for community-based organizations and employers that want to help them succeed.
Recommendation #1: Conduct increased outreach to employees who might be eligible for Public Service Loan Forgiveness.
The Department of Education has done some work to reach borrowers directly and inform them of the PSLF program. But more needs to be done. Employers and community organizations should take a cue from the American Student Assistance PSLF campaign, “10 Years to Zero Debt,” which aims to inform eligible borrowers and qualified employers through a variety of methods, including a social media campaign, advertising, outreach to various constituencies such as police and teachers unions, and partnerships with employers.
Teachers’ unions and public sector unions are a great place to start with outreach and should work closely with their members. The U.S. military should inform its servicemembers, as well as veterans, that their service counts toward PSLF. And federal, state, and local governments should be encouraged to contact their employees about the program. There’s also an opportunity for payroll companies like ADP and PayChex to incorporate information about PSLF through their payroll systems and to retain information that might be useful for PSLF determinations (like a print-out confirming the period of full-time employment for each employee).
The Department of Education could help here by establishing a toolkit to help with this outreach. It could include a customizable draft letter to employees; a one-pager with information about the program and its requirements; and clear instructions on how borrowers should select the correct repayment plans, submit regular Employment Certification Forms, and apply for PSLF forgiveness. It should provide that information in a Dear Colleague Letter to the heads of these organizations and agencies, as well as distribute it widely online.
Recommendation #2: Borrowers, keep notes.
Until a smooth forgiveness process is established, current borrowers seeking forgiveness shouldn’t rely on servicers, the Department, or their employers without a back-up plan to verify each and every requirement for PSLF. They need to ensure all of their ducks are in a row if they hope to have forgiveness granted in a timely manner, without making extra payments. Unfortunately, this leads to added burden for the borrower. But these recommendations are wise for any borrower, and especially for those hoping to receive Public Service Loan Forgiveness.
Recertify your income for your income-driven repayment plan every year, on time. If you don’t, you could wind up making payments that won’t count toward PSLF; and your payments will likely be higher than they would have been. Check every recertification note you get from your servicer to make sure it’s the right plan, and that your payments seem correct.
Fill out your Employment Certification Form every year and every time you change employers; it’s not required, but it will make it easier for you to track your progress, ensure you and the Department are on the same page about your service, and identify issues early. Once the servicer informs you of how many qualifying payments you’ve made, be sure to retain this information.
Keep a paper trail of your loan payments. If there’s an issue later, you’ll want to have the information handy. This is especially critical before you submit an employment certification form or an application for forgiveness, in case any information is lost about your payments as your loans are transferred to the PSLF-specific servicer. This can be done by downloading the records from your servicer, tracking payments made from your bank account, and keeping track of every letter or email you get about your payments.
Check out our next post for recommendations to Congress to improve the PSLF program.