April 2, 2020

Top 3 Reasons Teachers Are Denied Loan Forgiveness


Why is Teacher Loan Forgiveness Important?

Teachers can have the option of both Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness (TLF) programs, both being essential opportunities that many teachers rely on when pursuing a career in education. Often times, teacher salaries will not be substantial enough to cover both their living expenses as well as student loan payments, especially starting out. With the help of PSLF or TLF, teachers can pursue careers in education with more peace of mind. But unfortunately, many teachers are not approved for loan forgiveness. In fact, a staggering 99% of loan forgiveness applicants are denied due to various reasons that shouldn’t be as common as they are. Here’s the break down:

Teachers Are Denied Due To Misunderstanding and Lack of Information.

1. 15% are rejected for having ineligible loans

Older repayment plans such as Federal Family Education Loans (FFEL) do NOT qualify for the PSLF program. However, you can still consolidate these loans into a Direct Consolidation Loan in order to qualify for PSLF. For TLF, teachers can have Direct Subsidized and/or Unsubsidized Loans or FFELs. Perkins Loans are not eligible for either program. However, they can be canceled through Perkins Loan Cancellation, teachers can have up to 100% of their Perkins Loans canceled after five years of eligible teaching service.

2. 24% of applicants were rejected due to incorrectly filed forms

Reasons for these mistakes:
  1. Errors made filling out forms and/or applications such as: leaving items blank, inconsistencies, and correction errors (signifying with an initial to approve changes on the application)
  2. Not submitting the Employment Certification Form each year – this is a requirement for PSLF
  3. Not submitting re-certifying income each year to stay enrolled in an Income-Driven Repayment Plan – this is a requirement for PSLF

3. 55% of people didn’t match all the requirements to receive forgiveness

  1. Not being enrolled in an Income-Driven Repayment Plan – this is a requirement for PSLF
  2. Not having made the 120 on-time payments – this is a requirement for PSLF
  3. Not meeting the five complete and consecutive years at a Title 1 school - this is a requirement for TLF

There is a clear problem the student loan forgiveness processes are unintuitive. Teachers need an easier way to manage their loans, requirements, and qualifications for PSLF and/or TLF. With Chipper, we can help you keep track of your loans and the process of student loan forgiveness.

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