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By Kaitlin Mulhere
June 25, 2021
Collage of a row of students in graduation gowns with fading hundred dollar bills in the background
Money; Shutterstock

After a decade of painstakingly tracking student loan payments, some borrowers on the cusp of loan forgiveness have found themselves stuck in a cruel final stage: the waiting period.

Borrowers in the Public Service Loan Forgiveness program are reporting waiting for up to six months for approval of their forgiveness applications, often with little explanation why. Even though loan payments are paused for pandemic relief, borrowers still worry whether their approval will be processed before payments are set to resume in October. What’s more, they face the stress of knowing a change in their employment status could upend years of careful preparations.

Data released by the Department of Education last week show a paperwork backlog of about 147,000 forms — though the agency didn’t release the breakdown of how many of those were applications from borrowers who’ve made the required number of payments for forgiveness versus applications from those still in process who are submitting annual updates. The Department of Education did not respond to questions about the delay.

Public Service Loan Forgiveness, often called PSLF, was created to offer loan relief for borrowers who spend at least a decade working in often low-paying government or non-profit jobs. Borrowers have to make 120 qualifying monthly payments before getting their loans cancelled.

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Amy Cocuzza hit that 120 mark in January, after years of diligently monitoring her progress. She figured hers was a simple case: she’d worked as a lawyer for a federal agency for 10 years and submitted annual employment certification forms in recent years that showed she had made the required number of payments.

So when she submitted her application, she had no reason to think it’d be denied. But as weeks turned into months with no word, her anxiety grew. She started checking her account five, six, then seven times a day. There was, after all, a lot on the line. She’d planned her entire career and financial life around this promise.

“It just disappears into a void,” she says. “There’s no transparency. There’s no communication. You just don’t hear anything for months and months. And you start thinking, ‘uh oh, did I miscalculate somehow?’”

In the nearly four years since the first borrowers became eligible for forgiveness through PSLF, the program has gained a reputation for being a bureaucratic mess. Stories of servicers miscounting payments or borrowers getting conflicting information about whether their employer is eligible for the program are common. Denial rates remain high, so that even borrowers who say they’ve triple checked their eligibility can’t ignore lingering doubts that their loans won’t in fact be forgiven when they’re in this final stage of waiting.

The delay can take a huge mental toll on individual borrowers as they sit and wait for months, says Seth Frotman, executive director of the Student Borrower Protection Center.

“It’s just another insult to injury for borrowers in this system,” he says. His organization is particularly concerned if the government turns on payments before the backlog of forms is dealt with.

In some cases, there’s more on the line than just the discomfort of waiting. The program stipulates that borrowers not only make 120 qualifying payments while working for an eligible employer, but that they are still working for an eligible employer at the time their loans are forgiven.

That requirement added to the stress for Melissa Pennise, of Rochester, N.Y. as she waited. She applied for forgiveness in January. She works in public health at a non-profit organization, and like most non-profits, resources can change based on funding year-to-year. What if her job had been eliminated when this year’s budget was set in April?

That, thankfully, did not happen. And she logged on last week to find her $104,000 balance cancelled.

People who’ve worked toward forgiveness for a decade-plus want to move on with their lives, she says. “But you can’t do anything until those loans are gone.”

In the past few years, FedLoan, the servicer hired by the government to run Public Service Loan Forgiveness, has gotten a lot better at giving borrowers up-to-date information about their progress toward loan forgiveness, Pennise says. But once she’d applied, it was a lot harder to get answers. (FedLoan referred questions about the wait time for forgiveness to the Federal Student Aid office at the Department of Education.)

Borrowers like Pennise have taken to Reddit, Facebook and Twitter to swap stories about what to expect in the absence of more official information.

It’s not just people who are at the end of the road who are dealing with delays. Borrowers who are trying to certify their employment or get an updated count of how many qualifying payments they’ve made are reporting similar delays.

Arthur DeVore III submitted his paperwork to certify his employer in December. He’s still waiting. He also has private loans, so every month, when he pays his private loans, he calls to check on the status of his PSLF employment certification form. He works for the City of New York’s Equal Employment Practices Commission. It’s a local government agency, so it should be a cut-and-dried case.

“I’m frustrated because this should not take this long,” he says. “What kind of extreme verification process do you have that this is taking seven months?”

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Under normal circumstances, receiving a final notice of loan forgiveness under Public Service Loan Forgiveness typically takes between 45 and 90 days, according to Betsy Mayotte, founder of The Institute of Student Loan Advisors, which offers borrowers free advice on student loan repayment. The timeline is definitely longer than that now, she says, likely because of disruptions brought on by the pandemic.

She expects the timeline to shrink again over the next few months. And the government has created a new tool that should help speed up the process of certifying employment if your employer is already in the system as one that’s been approved for PSLF. Mayotte says that, anecdotally, borrowers who have used the tool seem to be reporting a much shorter timeline than people who submit their paperwork by hand.

One simple improvement, in the meantime, would be if borrowers were given clearer information about the timeline when they applied for forgiveness.

“Even if the time frame is not ideal, at least it sets expectations,” Mayotte says. Right now, instead, some borrowers report that the customer service representatives say they are not allowed to give any timeline. So, people call repeatedly for updates or submit multiple applications, which only further clogs the system, Mayotte says.

That tracks with what Cocuzza went through. When she first submitted her application and asked for a timeline, she remembers being told it could take two or three months. But on subsequent calls to FedLoan, she got inconsistent answers.

“My sense is that you could probably call three times in an afternoon and get three different stories about what’s happening with your application,” she says.

Despite those challenges, Cocuzza’s is a success story. Last week, after 154 days, she logged on on after lunch — her second check of the day — to find her application had finally been processed. Her loan balance dropped from $227,609 to $0.

“When I realized that the loans had zeroed out, I just started sobbing.”

More from Money:

A Technicality Is Holding up Student Loan Forgiveness for More Than 67,000 Borrowers

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Should Biden Cancel Student Debt? The Loan Forgiveness Debate, Explained