Struggling veterans encounter bureaucratic hurdles in their attempts to have promised student loan cancellations realized
Thousands of military service members like Jodie Parks and Stacy Hunter are facing challenges in having their student loans forgiven under the Public Service Loan Forgiveness (PSLF) program.
Jodie Parks, an occupational therapist working at a Michigan state psychiatric hospital, has about $48,000 in student loans. She spends four hours a week trying to prove her military service to have her loans forgiven. Despite her efforts, she has faced difficulties in getting employment certification form signed by the Air Force for her forgiveness application.
Similarly, Navy veteran Stacy Hunter, 46, submitted her DD 214 with her forgiveness application in October but was told that her seven years of Navy service didn't count toward her 120 payments.
These struggles are not uncommon. Ninety-two percent of military borrowers who applied for loan forgiveness before the pandemic were denied by the Department of Education.
However, there is hope. The Department of Education is working with the Department of Defense to set up a system that would automatically match data across the two agencies, which could end borrowers' hours on the phone seeking signatures. This system is expected to make the process smoother for military service members.
Moreover, the temporary rule change by the Biden administration in October loosened the program's rules for one year to give more borrowers the chance to qualify. The Department of Education announced in October that months spent on active duty count toward Public Service Loan Forgiveness, even if the service member's loan payments were in deferment.
Mike Smiley, a former Navy doctor who served for 14 years, also encountered many difficulties in getting the necessary signatures and submitting his application. His loan forgiveness was approved on March 22 after these difficulties.
The Department of Education is also collaborating with advocates to draft new permanent regulations designed to help more borrowers qualify after the waiver expires in October. These regulations are expected to make the process more accessible for military service members.
To ensure their student loans are forgiven under the PSLF program, military service members need to meet several key requirements. They must work full-time for a qualifying employer, have federal Direct Loans, make 120 qualifying monthly payments under a qualifying repayment plan while employed full-time by a qualifying public service employer, submit the Employment Certification Form (ECF) annually or whenever changing employers, and utilize available deferments or forbearance options based on military service.
It is also recommended that borrowers verify their loans and employer status regularly through the U.S. Department of Education’s PSLF tools, keep detailed records of payments and employment documentation, and submit the ECF annually or whenever changing employers to ensure their employment qualifies and to track progress toward PSLF.
As of the end of February, the Department of Education had about 173,000 forgiveness applications in process. About 1,500 military members have had their loans forgiven under the waiver since October. The latest department data show that, from October through early March, about 100,000 people total had qualified for loan forgiveness.
Despite the challenges, Jodie Parks feels lucky that her work schedule makes it possible to keep on top of her forgiveness application. With the improvements being made by the Department of Education, more military service members like Jodie and Stacy may soon see their remaining federal Direct Loan balances forgiven.
- Innovation in data matching between the Department of Education and the Department of Defense could streamline the Public Service Loan Forgiveness (PSLF) process for military service members, potentially reducing the hours spent on the phone seeking signatures.
- The temporary rule change by the Biden administration has loosened the PSLF program's rules for a year, allowing more borrowers to qualify and giving hope for student debt relief to military service members like Jodie Parks and Stacy Hunter.
- Education and self-development through higher education can lead to careers in public service, but the current PSLF process, with its complex requirements and potential difficulties in signatures and loan forgiveness, contributes to educational inequality among military service members.
- To finance their higher education and alleviate the burden of student debt, businesses and financial institutions could consider offering scholarships or grants to military service members, thereby supporting their contribution to public service and reducing inequality in education.
