Education Dept. rejects most applicants for student loan forgiveness program
latimes.com
latimes.com
Nonetheless, because so many people couldn't figure it out, Congress allocated an additional $700 million to help those folks. But, as far as I can tell from the article, the people being denied are the ones who still can't figure it out. 28,640 of the 38,640 had not previously applied for loan forgiveness. Of course those people must be rejected--this $700 million is a supplemental program for people who goofed up and got rejected from the regular PSLF. It would make no sense to let people get money from that program before they were rejected from regular PSLF. The other reasons for rejection are even more meritorious. If you haven't been paying for 10 years, or were paying less on your incorrect plan than you would have under the PSLF plan, you shouldn't get loan forgiveness--you haven't paid in what you were supposed to. Likewise, the federal government cannot do anything about private student loans. It goes without saying that people who don't have 10 years in a qualifying public-service job shouldn't get forgiveness. Literally every reason mentioned in the article for rejecting these applications are good reasons for rejecting these applications.
The "supplemental PSLF" is: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell...
A program that is supposed to help 10s of thousands of students ends up helping very few. Does this mean that all the rejected people are lazy, stupid, or grifters? Or is the program implemented poorly?
Name: _________________
Taxpayer ID: __________
To build the infrastructure to do this would cost the government probably $100 billion. See healthcare.gov for an example where they tried to do something similar.
Perhaps the US’s relative state independence doesn’t help it here.
The issue here is not filling in the forms properly, but people failing to look carefully at the underlying requirements for eligibility and make sure they meet them.
Welcome to the federal government.
It was a huge source of medical care for the poor and working class well into the early 1900 (serving ~1/3 of the population), but was strangled by the AMA and the centralization of unions: http://www.freenation.org/a/f12l3.html
I think it’s particuarly interesting because it was completely absent from all my previous education about medical systems. I only recently learned it existed, and it’s changed my views significantly. (I.e. I’m no longer of the opinion that switching to full government management is a good target, but rather, the government should stop propping up and providing corporate welfare to the systems which strangled mutual aid societies.)
And no, if you have a kid under 10 with you, you can't do it online. You have to show up in person with both parents.
That's a better job than Comcast or Blue Cross ever did for me.
Imagine if the only way to get a court to hear your plea were to file the correct form of action. Depending on what you want the court to do, you might have to file a different form, and you also have to know which court to petition. As you probably know, courts following the English law tradition have simplified their forms of action (say, [0]) so that this task is much easier now than it used to be.
A common problem with this sort of program is that the bureaucratic requirements end up preventing people from successfully applying or completing paperwork which they didn't know that they needed to handle. While this might seem like a mere UX problem to you, or perhaps "a formality", I assure you that it can and does drive people mad. [1]
That's just my own POV, which really doesn't align with either D or R a lot of the time.
I'm doing to draw an example to hiring in the tech industry for example. It's fair to have a phone interview for a job position, I think we could all agree on that. The same goes for a phone interview plus an in-person.
Now let's start adding more steps into the mix. Let's say you need a phone interview, followed by a small side project, another phone interview, a timed test, then multiple days of in-person interviews, followed by another phone interview and ending with a final vocal offer (which if you don't say the right salary might be rescinded).
Are each of these steps valid in itself? Sure. But every time you add an additional step, you end up shedding a lot of individuals. Some that might be actually pretty good hires, but made a small mistake that got them filtered out early. The end result is the company has trouble finding 'the right candidate' and a position ends up open for months.
It's the exact same idea here. The government has added so many steps and gotcha moments that all it takes is one small mistake to get denied.
In response to an inquiry from Kaine, the Education Department
disclosed last week that 38,460 people had submitted requests
for forgiveness as of Dec. 28 under the new program. Most of
those, 28,640 people, were immediately rejected because they
had not previously filled out a formal loan forgiveness
application — one of the many criteria of the relief program.
Of the 9,820 applicants who cleared the first hurdle, 1,184
are still under consideration. The rest were rejected for
myriad reasons. Of the applicants who cleared the initial
hurdle, 40% still had years to go before hitting the required
10-year mark. Nearly a quarter were ineligible because they
were paying less money in the wrong payment plan than they
would have in the correct one.
Others were turned away for having the wrong type of federal
loan — those originated by private lenders through the
now-defunct Federal Family Education Loan Program. Some had
not made enough on-time payments or had not had at least 10
years of full-time employment certified by a qualifying
employer, according to the department.
It clearly says you need to have had the loan for 10 years and been paying on time payments and have a stable job. Those requirements don't seem absurd, outlandish, nor designed to make people fail.
If you don't meet those minimum of requirements, why would the tax payer want to forgive your debts - you clearly didn't hold your end of the bargain, yet want to be released of potentially thousands or tens of thousands of dollars of public-money debt.
Or talked with customer support agents for the program that who told my wife that a formal loan forgiveness application was not required, and would be a waste of time. Just meet the criteria and apply when your 10 years were up.
But what those criteria were was not described clearly enough to make 10 year plans on. And the general confusion was so massive, the program so obviously a shambles, that we decided there was little chance that the program would survive, and passed on it.
The point still stands, however. For a program as controversial as this (loan forgiveness in general, that is), it's amazing there's any program at all.
Those wishing to be granted forgiveness have a clear list of requirements they need to meet in order to be considered - yet the article wants me to be outraged at the current administration because so few people that applied bothered to even read the requirements.
Effectively, every dime you put down towards interest on a federal loan is money that could've been spent towards things that benefit the market. If you were to take a pure free market approach, federal student loans are theoretically a Very Bad Thing and it should be in the government's interest to reduce those.
If you gave someone a raise but they were still deep in debt, the raise wouldn't be enough to cover the growing costs of having a large loan loom over your finances. In this case it would be more effective to pay off the loan if you value said worker keeping more of their money.
Plus not all public servants are facing debt, which means that the people with debt are going to gain less benefit from an overall raise.
EDIT: I also just checked this comment in the iOS app as well as a mobile browser and it looked completely fine. So, again, offer up a solution or provide details of your device so others can inform on how to fix this.
In response to an inquiry from Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of Dec. 28 under the new program. Most of those, 28,640 people, were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program.
Of the 9,820 applicants who cleared the first hurdle, 1,184 are still under consideration. The rest were rejected for myriad reasons. Of the applicants who cleared the initial hurdle, 40% still had years to go before hitting the required 10-year mark. Nearly a quarter were ineligible because they were paying less money in the wrong payment plan than they would have in the correct one.
Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program. Some had not made enough on-time payments or had not had at least 10 years of full-time employment certified by a qualifying employer, according to the department.
I would have done this myself but I was on mobile at the time. As for devices, the fixed width quoting requires horizontal scrolling on both the iPhone SE and iPhone 6.
> A Qualifying employer includes the government, a notfor-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or a private not-forprofit organization that provides certain public services.
and it goes on to give definitions of "government" and "not for profit" orgs.
Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.
https://www.americanbar.org/news/abanews/aba-news-archives/2...
“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness. "They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”
https://www.cnbc.com/2018/12/18/borrowers-denied-public-serv...
“Others were turned away for having the wrong type of federal loan — those originated by private lenders through the now-defunct Federal Family Education Loan Program.”
Federal loan? Check. Working for a 503c? Check. Oh, wait — the type of federal loan you took out is the wrong kind. So you need to consolidate under this other kind. And yeah, it resets it such that none of the payments you made for the past 10 years count.
I’m lucky enough that it personally doesn’t really matter to me. I took on the loans for my education when the foregiveness program wasn’t in existence so I certainly wasn’t banking on a bailout. But the FFELP was still in existence when this program was being developed so I have no idea why those loans weren’t included.
I work in local government and personally know dedicated public servants who would stand to benefit from this program but none of them qualify.
[0] https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell...
I meet 4 of these 5 requirements by accident.
So let me try to make it clear: The main requirement they are failing is never having asked for loan foregiveness before
That is, they are applying to a program meant to help those who do not qualify for loan foregiveness, but have not bothered to ask for loan foregiveness in the first place.
As for "really apparent when you look at how little student debt has been forgiven" - you really don't want to measure the effectiveness of this kind of program based on how much money it gave out.
A lot of programs that successfully give out all the money do so due to fraud.
Name 3, with citations.
I'm not arguing it is per-se bad (It is impossible to run programs at that scale without some fraud rate. Medicare's fraud rate is 8-10%)
i'm arguing all you would do by forcing them to give the money out is increase the fraud rate - they will do less investigation of claims because they don't have to.
Worse, claims that look better on their face will be approved even if they push aside claims that aren't fraudulent.
This happens in medicare/medicaid all the time, see https://en.wikipedia.org/wiki/Medicare_fraud
You can also see this happened in pigford vs glickman, etc.
Isn't that then the fault of 1) the people who wrote the law and 2) the people who incorrectly told these applicants they were eligible?
Here's the form. It pretty straightforwardly specifies 120 on-time payments to school loans. https://studentaid.ed.gov/sa/sites/default/files/public-serv...
I wonder where all these people are coming from, that are just misapplying for student loan forgiveness.
It states:
> Neither the 120 qualifying payments nor employment have to be consecutive.
Do you know if any of the tens of thousands rejected were rejected because they made a single late payment as some are claiming? The text on the form does not make that a disqualifier. It would seem to be important to clarify whether the form is incorrect as pertains to the law, or if none of the claims made are true that a single, or even a sequence of, late payments scuttled eligibility for someone.
Yes, the many people claiming that a single missed payment will disqualify you are factually incorrect.
It's an outrage because if so few people are able to default on the loans, the lenders are not taking on any risk at all, and are in fact functioning more as a kind of mafia style protection racket.
$700 million funding for this secondary phase program.
Only 262 applicants had success; 38,198 no success.
So program costs 2.67 million per successful applicant. With loans between a few thousand and a quarter million dollars. Let's say $40,000 on average, which is 10.5 million for all of them spent, and the remaining $690 million is thus the administrative overhead.
People OK with this seem to believe the $690 million in administrative overhead is money well spent and the $10.5 million spent on actual loan payouts is nearly an extravagance.
Interesting.
This spending ratio is in line with those priorities.
https://www.forbes.com/sites/robertfarrington/2019/01/22/why...
I say this as someone who has a lot of money on the line; I have been in an income based repayment plan for about nine years, work for a local government, have a Direct Loan, etc., etc.
We'll see how the program still stands when I'm actually eligible to apply in October 2020...
https://www.americanbar.org/news/abanews/aba-news-archives/2...
>In a 54-page opinion, U.S. District Judge Timothy J. Kelly said changes to the eligibility requirements, made several years after the program began, were “arbitrary and capricious.” Kelly called one of the Education Department’s main arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument.
>Kelly ruled in favor of three individual plaintiffs who worked several years in public service and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.
https://www.cnbc.com/2018/12/18/borrowers-denied-public-serv...
>Here’s another example but it’s about being in the wrong loan program or repayment plan. But the fact pattern is similar. The servicers and the dept of Ed did a bad job implementing this program.
>“Lawson-Ross said she spoke to staff at Great Lakes around 10 times to confirm that she was on track for the forgiveness. "They told me, 'Don't worry about it. You're good to go,'" she said. Had she known her loans didn't actually qualify, she could have simply rolled them into a kind that did.”
I would think the end goal would be that the program could say "Hey you gave us $700 MM and we managed to get all these public servants in it and on track".
Can you provide examples of these ridiculous reasons so we can either conclude that the two of you are indeed invalids, or so he can re-evaluate his assumptions and perhaps stop denigrating folks like yourself?
Many of the above comments about how these people deserve to be rejected also come off as pretty unkind.
It was very slightly snarky perhaps, but appropriate to make a point. Maybe it’s better to hold off on the assumptions that everyone else must just be idiots. I’m fine with someone deciding that they are indeed idiots, but at least ask some questions and get their side first before declaring them so to the whole internet. Shit is rarely as simple as it might seem to an outsider. I doubt anyone who can manage to register for HN could fuck up the forgiveness application 7 times if the process was truly as simple as claimed.
I would also indicate that I feel like it's disingenuous to compare forgiveness programs of bachelors education compared to specialists like lawyers and PhD types where even state schools put you in the 80k+ club.
It's a little more complicated than employer-sponsored lunch because it applies to a variety of employers, not just the US government. And it targets a particular demographic (recent college graduates). But fundamentally it's (supposed to be) one more thing that humans factor into the decision of what sort of career to take.
There are reasonable arguments for and against the program, but soundbites like "they get to pay their debts like anyone else" do not really add to the conversation constructively.
They sent a bunch of letters which I ignored because (I thought) I didn't qualify until the last one with "Final Notice" so I figured why not? A while later they sent me a check for something like $2,600 -- they were literally begging me to take their money.
The article explains the reasons for the rejections. It's pretty clear that rules were established and are being followed.
I don't even agree with the concept of outright forgiveness of a loan without collateral without some genuine settlement; but surely a program like this needs some standards even if you don't disagree with the basic concept.