However, since its inception in 2007, only 2% of those that have applied for the program have received forgiveness through it. This rejection rate is largely due to unclear definitions of a “qualifying payment,” confusing annual recertifications, and a lack of proper support from loan servicers. So what do these changes mean for those who are pursuing or have pursued PSLF in the past? What action do you need to take?

Past Payments

One of the requirements for PSLF is that you must have federal Direct Loans or Direct Consolidated Loans, where the lender is the Department of Education. Many do not receive forgiveness through PSLF due to having the wrong loan type, as non-qualifying loans could still be taken out after the introduction of the PSLF program without any indication payments on them would not qualify.

Until 2010, under the Federal Family Education Loan (FFEL) program, many private lenders made federal student loans, which the federal government only reinsured. Previous payments on FFEL loans did not count as a qualifying payment towards PSLF. These borrowers’ only option was to either forgo the PSLF program or consolidate their loans into new Direct Loans. However, if they consolidate, their number of qualifying payments would start at 0. Previous payments would not be considered. It is the same scenario for those with federal Perkins loans, whose final disbursements went until June 30, 2018. Because of how long these problems existed, there is an 11-year time frame in which borrowers could unknowingly be taking out loans that would not qualify for PSLF.

Another requirement towards PSLF that many are unaware of is that a specific payment plan is required. Even if their loans were Direct Loans, if they were not on the correct payment plan, their payments would not qualify towards PSLF. Many borrowers opt for either a standard or graduated repayment plan. However, for PSLF, they are required to be on an Income-Driven Repayment (IDR) plan. Under an IDR plan, monthly payments are calculated on a borrower’s income and family size.

In many cases, this could mean lower monthly payments than a standard or graduated repayment plan. Because payments could be lower, some borrowers have paid hundreds or even thousands more than needed and still do not have any credit towards PSLF. Many also forget or are unaware that an IDR requires yearly recertification, meaning that while they may

be on the right repayment plan, payments after that annual deadline have not contributed to their amount of qualifying payments.

The new changes to PSLF will now, thankfully, allow any prior payments on these loan types or loans under the incorrect payment plan to count towards PSLF as long as the borrower was working for a qualified employer at the time. The Department of Education states that this will help over 550,000 borrowers and bring them an average of 23 payments closer towards qualifying for PSLF.

However, this does not mean that the borrower can sit still. If your loans are still FFEL or Perkins loans, or if you are on the incorrect payment plan, you will still need to have them moved over to Direct Loans and put on an IDR. Borrowers have a limited time waiver to get loans on the right path. This limited waiver period is until October 31, 2022. Those that miss that deadline will not have their previous payments qualify towards PSLF. This waiver will also apply to those who have already consolidated their loans into the Direct Loan Program. If you are not or are unsure if you are on the right track, you must reach out to reputable student loan experts, as this could mean years of difference between getting your loans paid off.

Military Service Members

Due to difficulty or inability to make payments when on active duty, military service members’ loans can be put on deferment or forbearance rather than active payment. However, while these payments are on temporary forbearance, the service member would not receive any credit towards PSLF. Under the changes to the PSLF program, active-duty members will still be able to receive credit for PSLF during these periods of deferment.

Previously Denied Applicants

Because previous payments could now qualify as payments towards PSLF, previously denied applications can be reviewed and reconsidered. This change comes along with the news of FedLoan/PHEAA, the student loan servicer previously responsible for processing PSLF, not renewing its contract with the Department of Education, and many people reporting discrepancies in their PSLF payment counts. These reviews mean many borrowers could immediately see forgiveness after review.

Those Who Have Been on Track Since The Start of Their Loans If you are a borrower who has always been on a Direct Loan and has been on an IDR plan, these currently announced changes will not affect your loans or PSLF count. However, it is essential to ensure that your IDR recertifications are being done correctly and on time. You must also stay employed full-time with a qualified employer and properly provide employment certification.

What Should I Do?

While these are significant changes to the PSLF program, the key factors remain. You will still need to work full-time for an eligible employer and have Direct Loans or Direct Consolidation

Loans while paying under an IDR plan. The crucial takeaway is that if you need to take advantage of the liability waiver for previous payments to qualify, you should immediately take action.

Everyone’s loan situation is different, and it is okay to be unsure of the status of your loans. If you have any concerns or are uncertain if your loans will be affected, schedule a conversation with a credible student loan specialist to discuss how these changes could affect your loans.

However, the list of challenges educators face is far more extensive and may not be as publicly well known. These self-perpetuating problems lead to faulty decision-making, diminishing education quality, and putting children’s safety at risk.

Numbers Before Education:

As economist Milton Friedman once said, “One of the greatest mistakes is to judge policies and programs by their intentions rather than their results.” For educators, you need not look any further than standardized testing to see the truth behind that statement. In theory, it may make sense: collect seemingly unbiased data to make decisions. If the intention is to help make decisions to help the schools, why are many teachers vehemently opposed to this form of testing?

Three common arguments on the harm associated with standardized testing are:

• Standardized tests only measure which students are good at taking tests rather than offering any meaningful measure of progress.
• Standardized tests are unfair metrics for teacher evaluations.
• Standardized test scores are not predictors of future success.
  • According to a study of over 55,000 Chicago public school students, a student’s GPA is approximately a five times stronger indicator of college success.

Because of the state and national government’s emphasis on these scores, teachers find it difficult to instruct their students in creative and engaging ways. Instead, they find themselves “teaching to the test,” as better scores can mean better evaluations and more funding. Students are taught to remember information to regurgitate onto the test, robbing them of the opportunity to learn applicable problem-solving and critical thinking skills to help them in the future.

While the goal may be collecting unbiased data for policymaking, the opposite is much more common; it makes for discriminatory policies. An example is Florida’s FSA test. Larger schools that did well on the exam would receive more funding. However, the smaller schools that struggled do not receive proper funding, creating a self-perpetuating system of underfunded schools staying underfunded.

As a tool to evaluate teachers, the test would make assumptions of a teacher’s abilities regardless of the teacher’s relation to subjects on the test. In other words, in a poor-performing school, the P.E. or music teachers would also be assumed not to be doing well, creating an unfair judgment of one’s teaching ability.

Fortunately, thanks to the hard work of the Florida Education Association with the Florida Department of Education, Florida will abandon FSA testing beginning with the 2022-2023 school year. As FEA president Andrew Spar says, “A student’s future shouldn’t hang on one high-stakes, make-or-break test, and one test shouldn’t dominate weeks that could otherwise be used for meaningful instruction. We welcome today’s announcement as a sign that Florida is moving closer to a system that focuses on students’ growth instead of on high-stakes standardized tests.”

Benefits:

Some teachers noted their benefits package being a perk of the career. However, this does not mean they are without concern regarding those benefits.

The rising cost of teachers’ health insurance coverage is one of the biggest concerns. The Bureau of Labor Statistics National Compensation Survey reported that teachers were paying 35% of their premium in 2007, more than other public sector employees. Today teachers are paying approximately 38%. In fact, on average, teachers pay a higher premium for family coverage than employees in the private sector. Some teachers report that these increased costs alongside minuscule raises have resulted in teachers making less per paycheck or raises being significantly less impactful than many would think.

One example in Texas shows when in 2020, the Texas Education Agency (TEA) worked with Governor Greg Abbott to provide an average raise of $5,200 for teachers with more than five years’ experience. The Texas State Teachers Association (TSTA) union is glad for the raise but claims it falls short. TSTA president Ovidia Molina said that the legislature did not increase the state’s $75 monthly contributions towards teachers’ health care premiums. “That contribution hasn’t been increased in almost twenty years, while health care costs have soared and continue to erode educator take-home pay.”

Another attractive benefit for teachers is pensions. However, financial pressures from the Great Recession have caused a shift in the funding for pensions. Unfortunately, teachers have had to bear most of the burden. Some school districts have abandoned other benefits, increased mandatory teacher contributions, and decreased the teacher’s share of salary used to determine their pension. There has also been an increase in the minimum amount of time one must teach before retiring. As one respondent states, “When I started teaching, 30 years was required by the state, and now it’s 35 years. At my age, the demands of dealing with behaviors, keeping up on continuing education and learning new technology, and engaging formats for delivery of content along with day-to-day grading and planning is taking a toll. If I could retire now, I would.”

Federal programs intended to help our educators with some forms of debt have also failed to assist teachers properly. An example of this is the Public Service Loan Forgiveness (PSLF) program which will forgive their entire loan balance after meeting the appropriate requirements. The National Education Association (NEA) reports that teachers’ average student loan debt is $58,700.00, making this a very beneficial program.  However, using the latest data provided by the Department of Education, only 2% of those who applied for the program were accepted due to convoluted definitions and unclear instructions. While changes to the PSLF program are coming, educators will still have to jump through hoops to receive assistance.

Let Them Be Heard:

A point brought up by a few teachers is that they frequently felt a lack of freedom in running their classes.

As schools continue to experiment with new programs, course offerings, and scheduling, teachers find themselves restricted in making choices on how to approach and implement those programs in the classroom, often leading to ineffective and inefficient teaching.

Another place teachers want to see more freedom and be able to voice their opinions is spending. While counties may give their teachers a small budget to spend on supplies, they often come with tight restrictions on what those supplies can be. These restrictions result in teachers spending their own money to supply their classrooms, putting further pressure on their already low salaries. Estimates state that between 2014 and 2015, teachers spent an average of $479 of their own money on their classrooms and The National Center for Education Statistics reports that nearly 10% of teachers spent $1,000 on supplying their classrooms. This budgeting issue has become so common that crowdfunding site GoFundMe has created an entire page on their website dedicated to tips on how to fundraise for a classroom.

In the last article, we discussed a proposal by Florida Governor Ron DeSantis to give $1,000 bonuses to teachers and principals in Florida. The money for those bonuses would be coming from the state’s Elementary and Secondary School Emergency Relief Fund (ESSER), which is part of the federal CARES act. The FEA argues for more freedom and choice in how those funds should be used. Spar says the focus should instead focus on issues such as additional funding and fair salaries. Spar claims it is also challenging to be excited about a $1,000 bonus when other proposed legislation (S.B. 84) could eliminate pension options.

Spar has also addressed a series of proposed legislation in Florida, such as SB 1014, HB 947, and HB 835, saying that these bills would make it more difficult for educators to join a union, thus making it more challenging to fight for students and voice their opinions.

As with any policies that could affect the education of students, it only seems fair for us to ensure they have a voice in the matters that affect them.

Teacher Shortage:

When we shine a light on teachers’ problems, the teacher shortage becomes less of a mystery. With the compounding stress and changes to the job with a lack of active support outside of teachers’ unions and some passionate allies, it becomes clear why people would reconsider the profession.

The Coronavirus pandemic had a massive impact on the job-related stress teachers experienced, a worrying fact when the State of Employee Communication and Engagement study reported in 2019, before the pandemic, that 63 percent of Americans were ready to quit their jobs due to stress.

A survey of NEA members found that 32 percent of respondents planned to leave teaching earlier than they initially thought.

In Florida alone, the FEA’s biannual report showed in August 2021 that there were nearly 9,000 vacancies for teachers and school staff, a near 67 percent increase from August 2020. Anecdotal evidence and news reports suggest that school administrators have substituted as bus drivers and custodians in some counties. In some extreme scenarios, districts have considered closing certain schools due to the shortage.

As one teacher states, “The teacher shortage is probably a result of the issues mentioned previously.  There are many careers that provide a salary that is substantially more than what teachers can make with only a bachelor’s degree.  Lack of parental and administrative support, along with adding more to teacher’s plates without help, are large deterrents.  Increasing years of service until full retirement is also an issue. With the shortage, I would think that states would be trying to resolve these problems, but I’m sure it’s not something they want to fund.”

Other reasons for the shortage include:

• A lack of multi-year contracts
• Overcrowded classrooms
• Fewer young people entering the profession
• More teachers leaving teaching sooner

It’s critical to remember that this problem doesn’t just affect teachers but also the children, robbing them of significant learning opportunities. In August 2021, more than 450,000 Florida students may have started the school year without full-time, certified teachers. They are instead learning from untrained teachers with temporary certificates and a large number of substitute teachers. Shortages amongst staff, such as bus drivers, counselors, school resource officers, and similar positions, puts students’ safety at risk.

Concerningly, this is another self-perpetuating system if left untreated. When we fail to address these problems, the perception of teaching as an undesirable career only increases, further decreasing the number of people choosing to become educators, only for those who do to have their problems dismissed, and thus repeating the cycle.

What Can We Do:

The unions do not have to be the only ones fighting for teachers. Many teachers stated ways non-educators could help them:

• “I see many of these problems as symptoms of the greater problem, which in my opinion is the neglect of National and state investment in public social programs. I think technology presents some really great opportunities, but schools, teachers, and students need access to it. I am always looking for ancillary materials, books, test creating software, professional development materials that can help me improve and benefit my students; however, there isn’t any funding to provide those resources.”
• “Active input from parents would go a long way for improving things for teachers.”
• “Money is what is needed! Taxes are where the money comes from. Not everyone is willing to pay more in taxes even though better-educated people will help us all.”
• “It would be very helpful if society would invest more in social work to help students and families with difficult home lives, be it through education, providing extra resources, or care. I think that would make a huge difference in the classroom.”
• And to repeat an earlier quote, “it is frustrating when parents and communities demand schools to provide a wide array of low-cost extracurricular activities and services while at the same time voting to defund those same institutions.”

The influence the public has in aiding their teachers is more extensive than they may think. Donating materials and supplies, crowdfunding, or volunteering can help ease the monetary costs teachers have to endure and provide the students with better, more relevant material to build their education.

When it comes to voting for policies that can help our teachers, many unions will post about them on their website, letting you read the proposed bill(s) and explain how it will affect teachers. As TSTA president Ovidia Molina says in regards to the 2020 raise, “The only reason it happened is because teachers and other school employees turned out in large numbers in the 2018 elections and unseated a dozen anti-education members from the Texas House and two from the state Senate and replaced them with education friendly legislators.”

Even simply talking to the teachers can go a long way in assisting them in performing their jobs, giving them an opportunity for a back-and-forth discussion on how to teach the kids best.

Ultimately, these actions mean a better education for our youth.

“A good teacher is like a candle – it consumes itself to light the way for others.” Because of our teachers’ sacrifices to make us and our youth the best versions of themselves, is it not due time we help them?

Stress can harm an employee’s job satisfaction, productivity, attendance, talent acquisition, and employee retention. According to a University of Massachusetts Lowell report, stress alone costs American companies more than $300 billion annually. According to the American Psychological Association (APA), money is the top cause of stress in the United States. With the ever-increasing cost of education, many borrowers cannot see this stress going away any time soon.

So, what options can employers offer to stop these loans from affecting their business?

Raises:

A pay raise is perhaps the most simple solution to help employees with their loans, and the logic is clear; more money should mean less financial stress. The APA’s 2020 survey appears to back this claim, reporting a disparity between household income and level of financial stress. Of households with an income less than $50,000, 73% reported that money is a significant source of stress, compared to 59% of those with household incomes of $50,000 or more saying the same. But this report also shows that regardless of income, money is a significant source of stress in most households.

However, despite being the simplest solution, a raise may not be the most feasible option to all employers, perhaps due to a lack of budget to provide a raise or the risk of compromising their current system for granting raises.

Consolidated Appropriations Act:

An option for businesses with available capital but would prefer not to give raises, the Consolidated Appropriations Act (CAA) of 2021 was signed into law through the end of 2025. Under the CAA, employers can make annual tax-exempt contributions of up to $5,250 per employee for eligible educational expenses without raising the employee’s gross taxable income.

Spread across the year as monthly contributions, this equates to approximately $437 a month per employee, a great benefit when the average monthly student loan payment is $393 a month.

However, if an employer cannot provide $437 monthly per employee, even small contributions can significantly impact the employee’s debt. Let us compare two fictional employees as an example:

Both employees have a student loan balance of $60,000 and are on a 25-year extended fixed repayment plan at 6.8% interest. Their monthly payment is $416.44.

• Employee A’s employer does not offer any CAA benefit. After 25 years of making payments on the original loan and accrued interest, Employee A will have paid a total of approximately $124,933. An amount over twice as much as they borrowed.
• Employee B’s employer provides them with $100 a month through the CAA. When combined with their regular payment, Employee B will pay their loans off in 16 years and save $26,927 in interest.

If Employee B’s employer gave the entire $437, Employee B would be out of debt in only eight years; almost two decades sooner than Employee A, and saving nearly twice as much in interest!

However, before contributing to your employee’s student loan payments, it is worth noting that the Consolidated Appropriations Act falls under Sec. 127(c) of the IRS code, which means the benefit must:

• Have a written plan document
• Not provide more than 5% of its total annual benefits to individuals who own more than 5% of the company’s stock.
• Not provide eligible employees with a choice between educational assistance benefits and any other taxable compensation
• Provide eligible employees with reasonable notification of the availability and terms of the program
• Benefit employees in an employer-designated classification that does not discriminate in favor of highly compensated employees, defined as an employee owning at least 5% of the employer’s stock or an employee that received compensation from the employer in the preceding year in excess of a specified amount determined annually by the IRS.

Redirecting funding of current benefits:

Of course, not every employer can afford or justify the expense of additional benefits. As an alternative option, employers could instead redirect funds away from their current, lesser-used benefits to help solve their employees’ student loan problems.

A recent Oliver Wyman survey found that 58% of respondents would prefer their employer make payments to help reduce their student debt versus making additional contributions to their retirement fund. 45% chose assistance with student loan repayment as the single most compelling employee benefit among six potential options, including retirement and health care contributions. 76% of respondents in an American Student Assistance organization (ASA) study stated that if a prospective employer offered a student loan repayment benefit, it would be the deciding or a contributing factor to accept the job.

One benefit that the Society for Human Resource Management (SHRM) suggests redirecting is unused PTO. A study by Oxford Economics reports that American companies are carrying $224 billion in liabilities due to unused vacation time, with the average cost being $1,898 per employee. As we saw in the CAA example, redirecting the cost of unused PTO towards an employee’s student loans could save them years’ worth of payments and thousands of dollars in interest.

Another commonly available but underutilized benefit is tuition reimbursement, sometimes called “tuition assistance.” It is important to note that “tuition reimbursement” does not mean reimbursement for student loans already taken out but instead refers to an employer contributing a predetermined amount of assistance for an employee’s future education. A 2015 survey conducted by the Lumina Foundation reports that U.S. companies collectively spend approximately $28 billion annually on these programs, but only 2-5% of eligible employees participate in them. The low participation may be because employees do not wish to pursue further education or that only 43% of employees are even aware their employer offers this benefit. Regardless, it does not change that this unused benefit costs participating companies approximately $5,000-7,000 annually per employee, enough to cover the maximum amount allowed through CAA donations.

The Oliver Wyman study also suggests that redirecting the cost of underutilized or less valued benefits would also significantly impact recruiting, referrals, and employee retention. Among working professionals with student debt, 90% say that having a student loan repayment benefit would positively impact their decision to accept a job offer, recommend an employer, or stay with their current employer.

Educating your employees on federal student loan forgiveness programs:

Various federal student loan forgiveness programs are available to almost every federal student loan borrower; however, many are unaware or misinformed about these programs.

A 2020 financial stress survey conducted by John Hancock Retirement shows that 50% of respondents agree that the workplace is an excellent place to receive financial information making it more important than ever for employers to educate themselves properly. And because it costs nothing for employers and employees to learn about these programs and check their eligibility, it is the most economical option.

Three of the most popular federal forgiveness programs to be educated on are Public Service Loan Forgiveness, Income-Driven Repayment Forgiveness, and Teacher Loan Forgiveness.

Public Service Loan Forgiveness (PSLF)

Introduced in 2007, Public Service Loan Forgiveness is available to all full-time public service workers and those working full-time for qualifying non-profit organizations. After making 120 qualifying payments on direct loans, the remaining balance, principal and interest, is forgiven by the Department of Education, tax-free.

However, reports from the Department of Education show that of the PSLF submissions between November 9th, 2020, and April 30th, 2021, only 2.1% of applicants received forgiveness through the program.

While the base requirements for PSLF may sound simple, the process is anything but easy. Convoluted annual recertifications, foggy definitions of what constitutes a “qualifying payment” or “direct loan,” and insufficient aid from loan servicers all contribute to a borrower’s rejection.

Because PSLF forgives the entire remaining balance, this program could provide the most considerable savings and lowest cost of any option available if done correctly. Therefore employers in the public sector are highly encouraged to have their employees contact reputable student loan forgiveness experts to prevent misinformation and discover how much this program can assist them.

Income-Driven Repayment Forgiveness (IDRF)

An option available to nearly all borrowers regardless of employer, IDRF requires the borrower to make payments under one of four repayment plans; Pay As You Earn (PAYE), Revised Paye As You Earn (REPAYE), Income-Based Repayment (IBR), and Income Contingent Repayment (ICR). Eligibility for each plan depends on the borrower’s marital status, loan type, loan history, and whether or not the borrowers’ loans are in default.

Depending on the loan type, payment plan, and if they used the loan for an undergraduate or graduate degree, a borrower can expect total forgiveness in 20 or 25 years.

As the name suggests, an “income-driven repayment” plan bases its monthly payment on a borrower’s discretionary income, calculated through their annual adjusted gross income and household size. Therefore IDRF is most beneficial to those with low incomes and a large household size who do not work in the public sector. Still, many borrowers could see lower monthly payments through one of these payment plans regardless of income and household size.

A consultation with a student loan expert can help employees determine which repayment plans are available to them and provide an estimate of what their monthly payment could be.

Teacher Loan Forgiveness (TLF)

A program exclusively for teachers, to be eligible, a teacher must:

• Have taught at least five consecutive years at a Title 1 school
• Work full-time in the classroom during those five years
• Have their state teaching certification
• Have a bachelors in the area they teach for all five years
• Not have an outstanding balance on any student loans on or before October 1st, 1998

This program grants $5,000 of forgiveness to teachers who meet the qualifications; however, math or science teachers in middle or high school and ESE certified teachers could be eligible for $17,500 of forgiveness through this program.

It is important to note that teachers can only receive forgiveness through TLF once and cannot be working towards TLF and PSLF simultaneously. Traditionally this makes TLF the better option for teachers with lower loan balances and PSLF preferable for those with higher loan balances.

A conversation with a student loan expert can help determine how much a teacher is eligible for and discuss their best options regarding their loan balance.

Conclusion:

Student loans will not disappear any time soon, if ever, but employers can be proactive and take action before it affects their own business any further.

Do they want to invest their own money for a greater return on investment? Perhaps all their employees need is to know their federal options. An employer could even combine their options, redirecting benefits to help cover an employee’s payments while working towards federal forgiveness.

Whatever option an employer pursues, one thing is clear; they need to take action now.

Stress

There have been countless studies on the effects of stress on an individual’s health (cardiovascular disease, obesity, depression), but stress can affect employees and their employers in other ways.

Some effects include:

• Lower job satisfaction and morale, resulting in higher employee turnover and higher administrative costs
• Reduced productivity
• Increases in absenteeism and tardiness
• Increase in number of days taken off
• Increased healthcare costs incurred by employers

A 2020 financial stress survey conducted by John Hancock Retirement shows that previously 39% of respondents reported feeling moderate to extreme financial stress. However, during the COVID-19 pandemic, that number increased to 62%, with 66% believing their economic situation will either remain the same or worsen. The financial impact of this stress on employers? According to the University of Massachusetts Lowell, stress costs American companies more than $300 billion a year in health costs, absenteeism, and poor performance.

Life choices

According to the ASA, 53% of young Americans stated that student loans were the deciding factor or played a major contributing factor in their career choice. Unfortunately, these choices lead borrowers to prioritize salary over job satisfaction, opt for the private sector over public service and feel trapped in their career path.

61% of borrowers interested in starting a small business indicate that their student loans have affected their ability to do so.

A 2018 study by the Center for Retirement Research at Boston College found that while student debt didn’t affect 401(k) participation rates, it did affect how much young workers were putting away. The report states that those with student loans have only half as much in assets at 30. The ASA reports that 62% of those in debt have neglected their retirement savings and hold off on other investments.

Those without debt must bear the burden of the careers not taken, the diminishment of public sector employment, and the lack of investments and entrepreneurship.

What actions can we take?

We cannot expect student loans to be going away any time soon, if ever. In the 2020 financial stress survey by John Hancock, 50% of respondents agreed the workplace is an excellent place to receive financial information, which means employers and employees need to get educated on their options for paying off student loans faster while saving as much as possible. Notable options include relief through employer benefits and federal student loan forgiveness programs.

Consolidated Appropriations Act, 2021

In December of 2020, the Consolidated Appropriations Act (CAA) 2021 was signed into law through the end of 2025. This act allows employers to make annual, tax-exempt contributions of up to $5,250 per employee for eligible educational expenses without raising the employee’s gross taxable income.

When spread across the year as monthly contributions, this equates to approximately $437 a month per employee, with the average monthly loan payment for graduates being $393 a month.

Even small contributions can make a dramatic difference in how soon an employee will see relief.

As a hypothetical example, an employee currently owes $50,000 with 10% interest on a 25-year extended fixed repayment plan. Those terms leave them with a monthly payment of $454.35 and, after accruing interest, having to pay back an approximate total of $136,305 after those 25 years. Alternatively, suppose their employer contributes $100 a month towards their loans. Added to their regular payments, they will pay their loans off in 14 years, 11 years faster, with almost $43,500 saved in interest, leaving the employee with more money in their pocket and, consequently, a happier employee.

Federal Student Loan Forgiveness Programs

A variety of federal student loan forgiveness programs exist for borrowers, with most being eligible for at least one program. Three of the most common federal student loan forgiveness programs are Public Service Loan Forgiveness, Income-Driven Repayment Forgiveness, and Teacher Loan Forgiveness.

Public Service Loan Forgiveness (PSLF)

Introduced in 2007, Public Service Loan Forgiveness is available to all full-time public service workers and those working full-time for qualifying non-profit organizations. After making 120 qualifying payments on direct loans, the remaining balance, principal and interest, is forgiven by the Department of Education. However, this program is not as simple as the DOE may make it sound.

According to reports from the Department of Education of the PSLF submissions between November 9th, 2020, and April 30th, 2021, only 2.1% of applicants received forgiveness through the program. How is it that a program accessible to so many has such a high rejection rate?

Most rejections are due to complexities in annual recertifications, unclear definitions of “qualifying payment” and “direct loan,” insufficient support from loan servicers, and general misinformation. Unfortunately, most borrowers falsely believe they are on track for public service loan forgiveness only to learn that is not the case when it is too late.

Any employer or employee in the public sector is encouraged to further research this program and check their eligibility by speaking with reputable student loan experts to avoid the large amount of misinformation spread about PSLF.

Income-Driven Repayment Forgiveness (IDRF)

An option available to nearly all borrowers, IDRF requires payments to be made under one of four income-driven repayment plans; Pay As You Earn (PAYE), Revised Paye As You Earn (REPAYE), Income-Based Repayment (IBR), and Income Contingent Repayment (ICR). Which of these repayment plans a borrower is eligible for will depend on marital status, loan type, loan history, and whether or not the borrowers’ loans are in default.

The time it takes to see forgiveness through the IDRF program can be 20 to 25 years, depending on which repayment plan(s) a borrower is eligible for and if the loan was for an undergraduate or graduate degree.

Income-driven payments base themselves on a borrower’s discretionary income, calculated through their annual gross income and household size, meaning this program is most helpful for those with low incomes and high household sizes.

A consultation with a student loan expert can help determine which payment plans are available to a borrower and estimate their monthly payment.

Teacher Loan Forgiveness (TLF)

As the name implies, TLF is forgiveness exclusively given to teachers that meet specific qualifications:

• Have taught at least five consecutive years at a Title 1 school
• Work full-time in the classroom during those five years
• Have their state teaching certification
• Have a bachelors in the area they teach for all five years
• Do not have an outstanding balance on any loans on or before October 1st, 1998

This program grants $5,000 of forgiveness to those who meet the qualifications; however, math or science teachers in middle or high school and ESE certified teachers could be eligible for $17,500 of forgiveness through this program.

Teachers need to note that you can only receive forgiveness through TLF once and cannot be working towards TLF and PSLF at the same time. Traditionally this makes TLF a better option for teachers with lower loan balances and PSLF more preferable for higher loan balances.

A student loan expert can help determine which option may be best for the borrower’s situation.

Conclusion

According to the American Psychological Association, finances are the top cause of stress in the United States. While student loans are a common source of financial stress, borrowers do not have to feel helpless. Whether a borrower receives aid through employer benefits or pursuing a student loan forgiveness program, knowing their options can mean all the difference in their job satisfaction and productivity. There is no cost in learning your options; can you afford the cost of not doing so?

Take control by taking action now. Employers and employees alike should reach out to credible student loan experts and discover their options for more information.

The main reasons PSLF applications are denied:

• Incorrect qualifying payment count
• Missing information on the forgiveness application
• Ineligible loans that don’t qualify for PSLF
• Ineligible employers that don’t qualify for the program

These are all preventable mistakes that our expert counselors will help you avoid.

Why leave your forgiveness up to chance by submitting your own applications or relying on your servicer to properly guide you through this long and not-so-straightforward process? Our highly qualified Counselors will handle the hard part and will guide you through every step with your best interest in mind at all times.

What we will do for you:

• We will verify that your loans are eligible for PSLF and that you work for a qualified employer.
• We will submit your Employment Certification to your employer and servicer every year. Our experts will audit the documentation to ensure that all the required information is filled out correctly so that it will be approved the first time.
• We will keep track of your qualifying payments and properly submit your yearly Income-Driven Repayment re-certifications on time.

We will ensure that you stay on track to complete your forgiveness in the least amount of time and that you will receive the highest amount of forgiveness possible based on your situation. To find out more about how we can assist you with this very important financial matter, schedule a complimentary consultation with one of our highly trained Counselors

There are three main requirements to qualify for PSLF:

• Direct student loans
• Qualifying repayment plan
• Certification of employment at an eligible/qualifying employer

When PSLF was established:

PSLF went into effect on October 1, 2007. So, if you started making qualified payments on day one, the earliest you could have seen your loans forgiven would have been October 2017.

How many borrowers are in the queue to receive forgiveness?

The numbers are from the most recent Federal Student Aid data.

Pay them off with accrued interest.

No surprises there, right? You could do it by making fixed monthly payments for 10 to 25 years (Assuming that you don’t use a single month of forbearance or deferment). Another choice is Graduated payments which go up every two years for the same 10 to 25 years, and you will pay even more interest (Like they are not collecting enough already). You will pay back a significant amount additional to what you originally borrowed.

Active Wage Garnishment and or Tax Offset.

When you don’t pay your loans and don’t take any action, you will eventually pay them through AWG (at a 22% interest rate). Depending on your loan balance, it could take a long time, and they will take 15% of your discretionary income straight from every paycheck you earn and tax return that you file. These are both not good options.

Partial or Total forgiveness. There are programs like Teacher loan forgiveness and Public Service Loan Forgiveness that can forgive your loan balance but are not quick and easy like some companies might portray. You must follow specific requirements for years in both programs.

The reality is that the loans will be paid off one way or the other. It will come out of your pocket or through a federal program.

As a Public Schools-approved vendor and an A+ Rated company with the BBB, we’ve helped over the years thousands of school teachers, administrators, and all types of public service workers from across the country learn what options are the best for them. TSLHG also enrolls them in these programs and tracks their progress so one may complete them successfully.