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Post: The Moneyist: ‘I will be dead before my student loan is paid off’: I work as a nurse in a public hospital, yet I never seem to qualify for loan forgiveness. Will Biden’s plan help?

Dear Quentin,

I am a 60-year-old retired nurse working on the COVID unit at a hospital in California. I work with the city’s Department of Public Health. My own brother died from COVID-19 the first year of the pandemic. I have had my student loans since at least 1996. My remaining balance is around $7,000. 

I was a single mom all those years, and had filed bankruptcy twice during this loan-repayment period due to family illness and my own disability which I have managed to, for the most part, overcome. I never seem to qualify for loan forgiveness. I have not worked for this public hospital long enough to qualify for the Public Service Loan Forgiveness. 

Any payments made prior to that employment won’t count towards that loan-forgiveness program. I started with direct-government loans. Then I was called by a loan servicer in 2002 who convinced me to consolidate with them. Now I am back to paying a direct-government student-loan servicer, but it looks like I have not made enough qualifying payments. 

There is always a loophole that leaves me indebted to student loans. This country is shameful when it comes to how it treats public-service employees and their loans. I will be dead before my student loan is paid off. Can you recommend any further steps I can take for this loan forgiveness?

Still Paying, After All These Years

Also see: So your $10,000 in student debt is canceled. Here’s what you should do with your new financial freedom. (Clue: Don’t splurge.)

Dear Still Paying,

Anyone who manages to navigate Public Service Loan Forgiveness and have their student debt canceled deserves a Ph.D. in navigating bureaucracy in a system with so many spanners-in-the-works that may actually run out of spanners. Any minor change to the servicer or to a person’s jobs can render them suddenly ineligible. Worst of all, many people have toiled away in a public-service job for 10 years only to then discover they fell foul of some rule along the way.

The Biden Administration announced a temporary expansion to the Public Service Loan Forgiveness program last year aimed at dealing with some of these issues. Under the waiver, which is scheduled to end on Oct. 31, certain types of payments, which previously didn’t count towards the 120 needed for relief, will count. Check out our step-by-step guide to taking advantage of the PSLF expansion.

As you are no doubt aware, President Joe Biden also announced last week that his administration would cancel up to $10,000 for borrowers earning less than $125,000 a year, and an extra $10,000 for borrowers who received a Pell grant in college. This loan forgiveness applies to federal student loans, and may help up to 20 million borrowers. (Private student loans only make up around 8% of the $1.7 trillion in student-loan debt being shouldered by Americans.)

The application to apply for forgiveness under the White House program will be available in mid-October. The Biden administration has said the forms will be relatively simple to fill out, but that is relative and — given that only 1% of borrowers had their loans discharged during the first year of the PSLF program — many graduates are understandably skeptical that they will qualify and/or be able to manage the latest chance to have their student loan canceled. 

First off, you should confirm with the DoE whether you have loans in the Federal Family Education Loan (FFEL) program or the Direct Loan program, says student-loan expert and author Mark Kantrowitz. “Some lenders participated in both loan programs, so knowing the name of the lender won’t necessarily be definitive. Note that FFEL lenders do not have an incentive or legal obligation to help borrowers take advantage of President Biden’s student loan forgiveness plan.”

Kantrowitz says you should confirm your eligibility with the Department of Education. You can check the status of your loans with your Federal Student Aid I.D. by looking at the “Aid Summary” on StudentAid.gov. This will include a list of all of your federal-education loans and tell you which ones are in the Direct Loan program and/or in the FFEL program. “If your loans were eligible for the payment pause and interest waiver, they are probably in the Direct Loan program,” he adds.

Next up: If your loans are in the FFEL program, you can make them eligible for loan forgiveness by including them in a Federal Direct Consolidation Loan. On StudentAid.gov, click on “Consolidate My Loans” under the “Manage Loans” tab. That will take you here. Note: It’s free. “Generally, it takes 30-45 days for the consolidation loan application to be processed,” Kantrowitz adds. If you haven’t heard anything, call 1-800-4-FED-AID (1-800-433-3243). 

I hope that helps, and I’m sorry that you are still paying off loans more than 25 years later. As one hopeful borrower told my colleague Jillian Berman, who has reported on those seeking student-loan forgiveness for many years: “I’ll kind of believe it when I see it.” Don’t lose faith. Please do everything you can to see if you qualify for forgiveness. It can be a frustrating and demoralizing system for many people. But, for you, there may finally be that long-awaited glimmer of hope. 

Don’t miss:

‘The weight of this debt is crushing’: I’m 74, and a retired speech-language pathologist with a student-loan debt of $200K. Am I obliged to pay it off?

‘Please help!’ It seems like I have been paying my child’s student loan forever. How much longer must I pay it off?

‘I feel deceived’: After 20 years of paying my student loan, I discovered I don’t qualify for forgiveness. My loans total $167,000. What can I do?

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

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