OPINION | SAVE YOURSELF: Student loans are being wiped away

I remember a few years ago when my dad learned how to text message, he kept sending group texts in all caps. Things like "GREAT DAY. HOW IS EVERYONE FEELING?" After a few months of this, my sister and I had to intervene. "Dad, why are you yelling all the time?" "Huh?" Poor guy didn't even know that when you text in all caps the recipient hears only yelling.

Now that we are on the same etiquette page, "HUGE STUDENT LOAN NEWS."

If you know anyone who has student loans or suspect you might know someone who has student loans and has worked for or currently works for the government or a nonprofit, PLEASE ASK THEM TO READ THIS. In fact, grab your keys and cup of coffee and drive to their house with your Arkansas Democrat Gazette iPad. Bring chocolate.

As background, the Public Service Loan Forgiveness program is a loan forgiveness program for those working full time for qualified employers (nonprofits, governmental entities, etc.). Public servants had (and still have) the opportunity to consolidate their student loans into a direct loan, enter into an income-driven repayment program, certify their employment with the employer and then make 120 qualified on-time payments. Then whatever balance remains after 10 years is forgiven, tax-free.

Two years ago, the first applications for forgiveness came rolling into the federal government. Thousands were submitted from folks hopeful and convinced that their break had come, and yet only about 2% of them had loans forgiven. Why? Most were in the wrong repayment program. Some didn't have the right loans. Some misunderstood their employment certification.

But many of those folks who met disappointment over such technical issues got some news this month that feels too good to be true. The government made a significant announcement regarding student loans. According to the Federal Student Aid website, "Now, for a limited period of time, borrowers may receive credit for past payments made on loans that would otherwise not qualify for PSLF [Public Service Loan Forgiveness]."

For instance, if you were in the Federal Family Education Loan Program that previously didn't qualify for forgiveness, your payments of any kind to those loans in the past decade suddenly could count under this new waiver opportunity. For people with the right loans but wrong repayment program, like graduated extended student loan repayment, your past payments could count under this waiver.

Studentaid.gov is an official government student loan website and is the hub for information about this waiver. The official language of the site makes the waiver process seem theoretically simple. They have broken down the steps each group of affected borrowers will need to take, broken down by loan holder type, status of loan forgiveness participation or those already in the program but who will benefit from additional payments counted with the waiver. On the website they advertise an upcoming Help Tool update, which I would check back for frequently. But for those with Federal Family Education or Perkins loans, you already have work you can start on before the update -- consolidating loans and certifying past employment.

THIS IS A BIG DEAL. In the past three days I have spoken to employees who stand to have entire student loan balances, some in the six digits, VANISH immediately (theoretically) with this waiver opportunity. They had been working for a nonprofit hospital or a school district for 10 years or more. Imagine if that could be you, and your loans might soon be WIPED AWAY. For many, this waiver might just get them that much closer to forgiveness.

For those who might benefit from this waiver, there is a catch, and it is the most serious one.

IT REQUIRES THAT YOU CARE.

The waiver window will close in October 2022, likely leaving you behind if you are required to take action to qualify and fail to do so. From what I see, this could be a lot of Arkansans -- a lot of hard-working public servants who can't afford their loans and need them forgiven.

Let's say you have $70,000 in student loans that you have paid on for more than 10 years while working for a nonprofit. In total you end up spending 2 hours surfing the federal student aid website learning new jargon and the details and requirements of Public Service Loan Forgiveness and the waiver opportunity, lose 3 hours of your life on hold with your loan servicer(s), and another 5 hours completing certification forms for past employers. That's 10 hours of work for the potential of $70,000 in forgiveness. This means that if you make less than $7,000 per hour with your current employer, then this would fall under the category of WORTH YOUR TIME.

While it may not be you, I know why people won't spend time on this, and I DO NOT JUDGE THEM. They are beat down. Their student loans are so impossibly huge for their $65,000 nursing salary that it's easier to ignore than face them. They are used to bad news and false hope.

I might compare it to a condition I have had since childhood, alopecia areata. People love to come along and direct me to new studies that promise a distant cure if I just stopped eating wheat, sugar, dairy and meat or meditated on my hair follicles for 5 hours a day. Yeah, OK, how about I just wear the wig and manage my lifestyle around the condition?

While I am not promising a cure for everyone, from what I can see it's a LOT of people who could see immediate relief or relief over the next several years.

Part of the reason this news has not made as big of a splash as one would have thought is that student loans for the past 18 months have been in "covid forbearance," where no payments or interest on the vast majority of federal loans were due or accruing, respectively. Student loans have been dangerously out of sight and out of mind.

But in February, STUDENT LOAN PAYMENTS WILL RESUME, and people will care suddenly. Folks could have $200, or $400, or $1,200 payments due each month.

On Thursday, I spoke to a woman who has $70,000 in loans that could go away with this waiver. Her husband is a teacher with Federal Family Education student loans that never qualified for the forgiveness program. They have been paying for more than a decade.

With this waiver, suddenly, all those on-time payments they made would count. Our 30-minute video call was a mixture of disbelief, unbridled joy, laughing, and then this statement: WE HAVE TO TELL EVERYONE ABOUT THIS.

I spoke to a nurse from Baptist Health who was successfully certifying for forgiveness on $200,000 in loans against all odds (see emotional barriers above), but even she will benefit with the new waiver. Over the past decade, she and her husband had several months where they missed the payment by just a few days, which the waiver will now automatically count. Every single month is significant for them. When payments resume in February, they probably will exceed $1,000 per month until their loans are forgiven, by her count, in October 2022. All that crushing debt will disappear.

Another employee at a public utility estimates that this waiver will bring forward forgiveness by a full year for her loans and those of her husband, a higher education employee, worth over $100,000 in forgiveness.

In an interview with the Baptist Health nurse, I asked her what advice she has for people to care, to take action, to do their homework. She said, "Nobody cares about your stuff except for you."

It pays to care. But how did she get over the emotional barrier of $200,000? For her, it was looking forward rather than dwelling on the past. Also helpful was an accountability partner at work who was also going for forgiveness. They remind each other when it's time to recertify their employment and share every article they can get their hands on around the rules.

The news of this waiver is still new, and the loan servicers are still operating in a lot of uncertainty over exactly how this will work. You might be inclined to wait, but my own opinion is to take as much action as you can as early as you can. Imagine trying to reach a loan servicer in January when all those payments will come due in February for millions of Americans after 22 months?

Plan to set aside uninterrupted time during the work week to focus on this. Exercise patience. Identify an accountability partner at work also going through these steps. Most important, get your emotional house in order. Look toward your future, one that doesn't have student loans in it. Abandon the past that might hold shame for the way you took on the loans or the amount you took out. More of us, yes I said "us," did this than you might think. Above all, I beg you to CARE.

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