“Look for the helpers,” says Mr. Rogers.
Since the announcement of the Student Loan Forgiveness, I have come to accept that only a small percentage of people will experience the significant financial benefit that the Limited Forgiveness will provide for Public Service Loan Forgiveness (PSLF ). Remember previous Save Yourself columns discussing the promise of waiver and how to take advantage of it. We’re not talking about a $500 off MSRP or a 15% savings on car insurance. In many cases, this is the equivalent of an entire annual salary in loans that disappear (tax-free).
The PSLF is a program that cancels the remaining balance on federal direct loans after 120 payments are made concurrently with public service employment. The program was created to promote employment in the public service, but did no such thing. As my partner Tim loves to joke, “The government created the PSLF to reward public sector employment, but somehow forgot to tell public sector employers.” By most measures, and for the reason the limited PSLF waiver was even created, it was a failure.
In 2018, more than 97% of people who should have been eligible were denied pardons, mostly because they didn’t do it right.
What does it look like on the ground? In March, a lawyer got help with her $80,000 in student loans. She was among the cohort who was denied a pardon even though she worked in the civil service and had never missed a payment in 15 years, 5 years beyond the 10-year requirement for the PSLF. What was she doing wrong?
Well, it all stems from a tiny bureaucratic fact that makes no sense to the borrower, but for some reason is of critical importance to the government. His loan classification was the Federal Family Education Loan Program (FFELP) and not a direct loan.
Within 20 minutes, she consolidated her FFELP loan into a direct loan and then recertified all of her public service jobs.
Here’s her reaction the morning she found out the waiver applied and canceled her loans. “It’s done!!!! My loans have been cancelled!!!!! I don’t even know how to react yet… I cried, I just looked at it, then I cried again.. . “
This woman, a lawyer, received a life-changing benefit from the waiver. The counterfactual? Well, with FFELP loans, normally after waiver, assuming she finally “fixed” her loans to a direct loan, her payment account would have started at $0.00. In the end, she would have paid for about 25 years and by then would have paid off all or most of that remaining balance. The Student Borrower Protection Center estimates that of a total of 40 million federally indebted borrowers, 9 million would be eligible for the PSLF. With the waiver deadline rapidly approaching in October, only about 15% are on track for the PSLF and benefiting from the waiver.
Enter the wizards on the left.
Meet Christina Ceballos, a mid-level municipal worker in Austin, TX who works in purchasing as her day job. Her friends see her public persona as a fairly normal woman doing her job, hanging out with her husband and dogs, and occasionally going to happy hour. What they don’t see is a heroic effort that happens on his evenings and weekends. In their spare time, Ceballos and a team of 17 support a Facebook student loan forum of student borrowers, all helping and helping each other navigate the nuances and complexities of the PSLF. They can solve problems in ways loan servicers can’t or won’t. And they do it for free.
The Public Service Loan Forgiveness Program Support (PSLF) group, the brainchild of Ceballos and a co-founder who has since departed, is here to guide people through basic education about the PSLF, putting them in contact with more than 100,000 members seeking or having obtained loan forgiveness. . Group members are the only ones capable of dispelling misinformation and ensuring members have the support and confidence to take the right steps and understand and follow every tedious rule.
As this renunciation began to take shape, this group began to grow at a rate that can only be described as overwhelming for Ceballos and his team. As membership has grown from 40,000 to 80,000 to 100,000 to today’s 123,000, this small team of volunteers has had to log more hours to monitor conversations, research and weed out misinformation. They must constantly evaluate members’ posts with questions for approval. For example, they will not approve the same question already asked several times the previous week.
For Ceballos, it’s personal, and his experience with student loans should make us reflect on our societal acceptance of their structure and scale. After two years in the Peace Corps in Mali, she attended graduate school to start a career in public service closer to home, taking on a heavy student loan burden.
Like many, Ceballos has mixed feelings about these student loans. They look much less like a good investment on the back-end, when faced with payments and the time invested in staying eligible and up-to-date with PSLF. Although she appreciates the things learned during her master’s studies, Ceballos thinks she probably could have obtained the same career advancement and salary through natural promotions without the debt weighing on her.
Above all, Ceballos was careful. In 2007, she heard about the Civil Service Loan Forgiveness Program and immediately knew it was for her. She had FFELP loans, which for the first few years were actually PSLF eligible until the government decided to change that, seeming to forget to inform FFELP borrowers of this little fact.
As a public procurement employee, Ceballos had special expertise in seeing that the program was not working as promised, after receiving information she knew was incorrect from her repairman. Don’t forget that she is a pro at reading fine print. This prompted her to contact financial groups to see if they could set up a forum for government officials with student loans to share information and help each other. When no one accepted, she realized it had to be her.
In 2018, she started a support group on Facebook, and the overwhelming rejection reports from the PSLF only spurred the group to work harder and smarter. Ceballos noticed that members frequently responded to other members’ questions with intelligent, well-researched comments and approached them to volunteer as administrators and moderators to formalize their role. They agreed.
But then some good news started rolling in. Ceballos recalls it being maybe once a month at first. A member would post a screenshot of a $0.00 loan balance, and the whole group would erupt with excitement. This enthusiasm would encourage members to persevere. The members learned from each other that to be successful at PSLF, they had to become paranoid and obsessed with their student loan situation.
Today, loan cancellation successes are spaced out by hours, not months. They could be $50,000 or $100,000 or their all time high of $563,000. But Ceballos and his team are not partying. They worry about those who desperately need this help and will not get it.
One of the most rewarding results for the team is seeing people stay in the squad even after their loan is cancelled. Members understand the power of this service and stay there to help where they can, including many group admins and moderators.
These are the helpers. If you know of people with student loans who work in the public service, they should take advantage of any employer-sponsored PSLF training or, failing that, apply to join Ceballos’ group. To find them on Facebook, search for “Public Service Loan Forgiveness Program Support (PSLF)”. Even if you don’t have student loans or you don’t know people with them, isn’t it great to know that there are people like Ceballos and his team out there, out of order of the day, who just want to help?
Sarah Catherine Gutierrez is the founder, partner and CEO of Aptus Financial in Little Rock. She is also the author of the book “But First, Save 10: The One Simple Money Move That Will Change Your Life”, published by Et Alia Press. Contact her at [email protected]