Why 100,000 Borrowers Were Rejected For Student Loan Forgiveness

The latest student loan debt statistics show that more than 100,000 people who applied for public service loan forgiveness have been rejected.

Here’s what you need to know and what to do about it.

Student Loan Forgiveness: Debt Statistics

The U.S. Department of Education released the latest statistics for public service loan forgiveness:

• As of June 30, 2019, 90,962 student loan borrowers submitted 110,729 applications for public service loan forgiveness.
• Of that total, approximately 102,051 applications have been processed. Another 8,677 applications are pending.
• Of the applications processed total, 1,216 have been approved and 100,835 have been rejected.
• Of approved applications, 76% of borrowers work for the government and 24% work for non-profit organizations.

How many student loan borrowers were approved for student loan forgiveness?

Well, 845 borrowers have collectively received $52 million in public service loan forgiveness. The average student loan balance discharged is $61,592. That’s less than 1%.

Another 726 requests have been approved under the Temporary Expanded Public Service Loan Forgiveness Program. Of this total, 681 borrowers received $28 million of student loan forgiveness. The average student loan balance discharged is $41,368.

Why were borrowers rejected for student loan forgiveness?

To date, 100,835 borrowers have been rejected for public student loan forgiveness. Here are the reasons why:

• Qualifying Payments: 55%
• Missing Information: 24%
• No Eligible Loans: 15%
• Employment Dates: 2%
• Employer Not Eligible: 2%

The good news is that many of these issues can be overcome by understanding the requirements for public service student loan forgiveness. Many of the borrowers that have been rejected started student loan repayment when this program was in its infancy. As more information becomes available, let’s help you ace student loan forgiveness.

Public Service Loan Forgiveness: Requirements

It’s not as simple as saying you “work” in public service. The Public Service Loan Forgiveness Program is a federal program that forgives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in an eligible federal, state or local public service job or 501(c)(3) nonprofit job who make 120 eligible on-time payments. More than half of borrowers rejected did not make qualifying payments. Don’t be like them.

The requirements can be tricky. Many applications were rejected due to missing or incomplete information, or not meeting the program requirements. The most recent data reflects some of earliest applicants to the program, which started in 2007, and required 10 years of student loan payments. Over time, the approval rates should increase as more borrowers become familiar with the Public Service Loan Forgiveness program.

Here are 4 things to remember:

1. Complete the Employment Certification Form

You must complete the Employment Certification Form. How often should you submit the employment certification form for public service loan forgiveness?

You should submit the Employment Certification Form to the U.S. Department of Education:

• when you begin a job in public service
• when you switch employers
• annually to ensure you’re on track

2. Enroll in an income-driven federal student loan repayment plan

To be eligible for public service loan forgiveness, you must be enrolled in an income-driven federal student loan repayment plan. Remember, only federal student loans are eligible for public service loan forgiveness. You also must make a majority of the 120 required payments while enrolled in a federal student loan repayment plan.

3. Consolidate your federal student loans (if necessary)

Only Direct student loans qualify for public service loan forgiveness. If you have Perkins Loans, FFEL Loans or you borrowed student loans before 2011, you may need to consolidate these federal student loans into a Direct Consolidation Loan. Don’t be part of the 15% who were rejected for having ineligible student loans. You can consolidate federal student loans through StudentLoans.gov.

4. Refinance your student loans

If you plan to have your federal student loans forgiven, you still need an action plan for your private student loans. The good news is you can refinance private student loans and lower your interest rate – even if you are enrolled in public service loan forgiveness.

This student loan refinancing calculator helps show you much money you can save through student loan refinancing.