When the Department of Education announced a plan to fix many hellish problems with its Civil Service Loan Forgiveness Program, hundreds of thousands of beleaguered borrowers gasped.
Since 2007, the program has promised hope to those committed to advancing the public good. If they made 120 payments on time, their loans would be forgiven. During this period, their balances often increased due to the income-tested payments required by the program.
The devil was in the details, and the devil often won. Borrowers frequently shared their stories of years-long bureaucratic struggles. The waiver program announced in October, however, promised to open some doors – borrowers could apply for credit for categories of payments that were previously not eligible.
And over the past few weeks, the momentum has turned: expiring borrowers find themselves in the light, debt-free. “I am extremely grateful,” Katherine Ojeda Stewart, a public defender in Los Angeles, told me. “But the emotional capital you had to spend cost me a lot.”
I spoke to six borrowers who in total were released from over $800,000 in debt. Their stories tell of the hope, disappointment and ultimately the relief felt by so many.
Assistant State Attorney | Wheaton, Ill.
Debt relief: $200,000
To participate in the PSLF program you had to know it existed in the first place – and many didn’t find out for years because the Ministry of Education did a lousy job spreading the word about its program which could be life changing.
Louisa Nuckolls, 50, was one of the lucky ones. She was tipped off early by a defense attorney who once had a job like hers. “It was around 2008, and he told me there was this new program where if you worked in government for 10 years, you could have your loans forgiven,” she said. “He said he would have liked to stay in the district attorney’s office.”
Administrators in his office quickly heard about it and encouraged people to sign up. What, they thought, did everyone in the office stand to lose by participating in the fledgling program?
“They started sending emails saying, ‘Hey, it’s over there – we don’t know how effective this is going to be,'” Ms Nuckolls said.
They were right to be skeptical: Over the past few years, Ms Nuckolls kept noticing inaccurate payment accounts when she checked her status. They were never in his favour.
“It was almost like the ball kept moving,” she said.
Katherine Ojeda Stewart
Deputy Alternate Public Defender | Los Angeles
Debt relief: $315,000
Katherine Stewart, 39, has been caught in even more of the program’s trappings.
Fresh out of law school, Ms Stewart earned so little that her income-tested repayment scheme meant she had nothing to pay on her student loans. Just to be sure, though, she still made small payments: sending a little something would mean she would definitely get credit, she thought, because there would be a payment record.
Paradoxically, Mrs. Stewart got in trouble for this. Often, people like her wouldn’t get credit for a month in which they paid more than they were supposed to, stifling their progress toward the 120 payments they needed. Trying to move forward forced them to stand still.
It wasn’t the only problem. Because she lived near the scenes of the California wildfires, she was placed on a kind of automatic emergency forbearance – and didn’t get credit for forgiveness of the monthly payments she was making again. This happened twice.
On top of that, the entities managing her payments changed several times and she continued to lose credit for payments made during the transition.
Dealing with repairers was “nightmare,” Ms Stewart said.
“It was, like everyone else, a second job,” she said.
The program even tested Megan Harrington, who contributes to policy development – including on education issues – in the office of Senator Rob Portman, Republican of Ohio. When voters reached out to their own PSLF issues, she could offer a comforting voice and perhaps some notes on any regulatory or legal adjustments that were being considered.
Ms Harrington, 36, could also sympathize: Several years of her records disappeared after two former repairmen closed, a problem that took more than a year to sort out. His Capitol Hill friends — Democrats and Republicans — also struggled to navigate the system.
“People probably don’t realize that a lot of people on the Hill got caught up in this too,” she said.
The troubles caused some problematic messengers.
“People involved in public service, we will work with full hearts and energy, to do jobs to help people, because we believe in what we do and it is a calling,” Ms Harrington said. . “When you have a badly administered program and it’s so frustrating for people, there’s a real risk that people will even want to go into public service.”
But at its best — and one day it might — the PSLF program attracts people who might not have considered public service at all.
“It has been the privilege of a lifetime to work on behalf of the people of Ohio, to help Washington understand the concerns of everyday citizens, and to help people understand what the federal government can do to help them – or at least not hurt them,” Ms Harrington said. “It has been gratifying. But it hasn’t been easy.
English teacher | Wailuku, Hawaii
Debt relief: approximately $105,000
David Negaard devoted himself to service right away, joining the Navy after high school. After six years and a stint on a missile cruiser, he left the navy and worked as a quality control engineer for several years before going to college.
“I wanted to be a teacher or a youth minister,” said Mr Negaard, 62. “The teaching was where, you might call it, the money was.”
Few teachers get rich, so let him explain what he was thinking in 1996.
“Previously, a degree was a guarantee of sufficient income to pay off any short-term debt,” said Mr. Negaard, who added a master’s degree in 2010. “But that’s no longer true. Many graduates are unable to earn the kind of money, commensurate with the cost of education, that used to be routine. And that includes me.
Indeed, the loan mix was too big at times, and he took hardship deferrals when it got overwhelming.
After 23 years in the classroom, Mr. Negaard believes he would have made a lot more money had he remained an electronics professional with a high school diploma. He therefore makes no apologies for availing himself of the PSLF program.
“I understand that I incurred the debt, and I am grateful that there are opportunities for someone like me, who chooses to serve the public good, to discharge a debt that has become heavy,” said- he declared. “Not because I had done anything wrong, but because the world had completely changed beneath me.”
Forgiveness is “life changing,” Mr. Negaard said.
“It allows not only to survive but to thrive and perhaps even to live fully, or more fully,” he said. “It opens up possibilities for my future in a way that very few things have ever done.”
Rebecca M. and Thomas H. Townsend
Associate Professor and Appellate Counsel | Longmeadow, Mass.
Debt relief: $33,000
The Townsends’ multi-generational student loan saga will be familiar to many – too many – families.
The father of Rebecca Townsend, a child of immigrants, was determined to send his three daughters to school. He and his wife eventually filed for bankruptcy – there was a lot of medical debt – and when he died in 2003 he and his mother were still paying off one of Dr Townsend’s loans.
She and her husband met when they were undergraduates at the University of Massachusetts Amherst in the early 1990s – Mr Townsend, 49, was the first in his family to graduate from college – and they eventually earned three higher degrees between them. Dr Townsend, 48, earned a master’s degree and then a doctorate, and is now an associate professor of communication at the University of Hartford. Mr. Townsend studied law and now works to preserve criminal convictions that are on appeal.
Financing everything was expensive: the two consolidated their loans, repackaging them into two monsters totaling $203,000. PSLF provided a glimmer of hope, and then came a crushing realization that the graduated repayment plan they had finally chosen to better afford the children made them completely ineligible.
So they started again under a new repayment plan in 2015. When Congress enacted one of its patchwork PSLF fixes in 2018, they too found themselves ineligible.
“It almost sounded like a cruel joke,” Dr Townsend said.
Late last year they applied for the waiver and crossed their fingers. This month, Dr. Townsend received the good news. A few days later, Mr. Townsend was notified that his payments were overdue.
Just kidding, a loan service representative finally told him. There was a mistake, and his balance had also fallen to zero.
A better future
Everyone who spoke to me expressed their gratitude for the relief. Ms Harrington cried when she heard the news. Ms Stewart’s wife also shed tears. Ms Nuckolls read her notification twice, then called her repairman to be sure. Mr Negaard “may have shouted”.
They also told me of their determination to move forward.
Ms. Nuckolls, the assistant state attorney for Illinois, has her eye on a condo and hopes to become a first-time homeowner in her 50s. Ms Stewart and her wife – who moved their two daughters into a house they bought in Hawthorne, California, last year – need not worry that student loan bills will derail them.
Mr. Negaard and his wife will pay off part of the mortgage on their 670 square foot condo. They dare to imagine traveling far from Hawaii and being able to afford to stay there during their retirement. Ms Harrington is considering her next career move now that Mr Portman is leaving the Senate, and she can consider jobs in the private sector without worrying that a position in a company will jeopardize her attempts to cancel a loan.
And like so many other parents – including Ms Stewart and his wife – the Townsends are taking money that would have gone towards paying off education debt and earmarking it for education debt prevention.
“We had been trying to save for college for our two boys,” Dr Townsend said. “We decided very early on, before we had kids, that we didn’t want them to have the debt that we had. I know my dad didn’t want that for his daughters either.