Federal Program Doesn’t Forgive Student Loans
Some students who were promised student loan forgiveness by the government are now filing suit against the federal loan program.
More than 550,000 students were given an option to work a public service job for ten years to have their student loans forgiven, but news came on March 31 that the Federal Education Department did not hold up their end of the bargain, according to the New York Times.
Public service loan forgiveness includes working at a official government establishment or a government funded location. The process is done by having the graduate work at the establishment and pay 120 monthly payments in the 10 years before they are forgiven for the debt.
Graduates that applied for this program beginning in 2007 were denied their student loan debt forgiveness. The rising issue is how they were denied their debt forgiveness despite following the protocols of the Public Service Loan Forgiveness program because of the switch in 2014 in which despite the graduates meeting their minimum payment, their total student loan debt kept rising.
The American Association Bar and four borrowers are currently filing the suit after they realized their end of the deal was not honored by FedLoan Servicing’s letters that could not be rescinded or binded according to pymnts.com.
“This is just terrible to hear,” UCO Student Austen Evans that is currently battling student loan debt of more than $3,000. “It is already hard enough for students to graduate and compete for the same job that other graduates are after but adding this new scenario would make life a little more difficult.”
This new predicament puts more distrust within the federal government after an incident earlier this year with Navient to students are currently in a legal battle after giving the student loan debtors obstacles to keep up with their payment after saying they could give bad advice according to nbcnews.com.
Students could have different methods of not trusting the federal government plans of student loan forgiveness by either not signing up with the large loan companies or consulting with your universities options.
UCO offers a local loan service that is currently not linked to the Navient incident and offers an alternative to student loan forgiveness.
“The Federal programs should be more concerned with the students leaving college with a large debt rather than their political affiliation,” UCO Counselor for Financial Aid Services, Jacqueline Jamison said. “But this does not mean that students could not take advantage of the multiple loan programs the university (UCO) offers.”
If the student ran out of options from the federal government aid, the student could apply for an Alternative Loan. This program offers students the last amount of money to finish out their graduating year in their last two semesters as all they need to qualify is a full-time employment.
The difference between the bill being enacted for student loan forgiveness and the federal program that offers it, is that if Oklahoma does not grant the teacher student loan forgiveness, it must be done under passed law. The other side with the program is that it is considered an option to their program where they have the ability to not confirm nor deny eligibility to the student loan program.