Stories 26

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Joined this group today and wanted to share my story. There is a PSLF Reddit group that has been helpful, but very few people have Direct Spousal Consolidation Loans like I do. Note, these are NOT FFEL loans but Direct Loans, a very small minority of student loans.
My spouse and I graduated with our Masters degrees in 1993 with about $30K in student loans each. Languished in economic hardship deferment and forbearance until 2000 when we were directed to a consolidation loan by Pennsylvania Higher Education Corp, now Fedloan. Continued forbearance as we could not afford minimum payment until about 2011 when we started the PSLF program. You know the drill: capitalized interest year after year resulting in a debt now of $283,000 even after we've spent 11 years paying over $1000/month.

I was just awarded "trophies" by Fedloan since I hit 128 payments! Great news, however since it is consolidation loan it is in FSA purgatory as they try to "proportion" the balance between us and forgive mine under PSLF but my spouse's will be retained and assigned to her. That is how I understand the regulation, however no one has actually had that happen yet that I know of. A handful of us on Reddit have sat with our 120 payments made but it is not being reviewed to be forgiven. It seems like there are so few of us in this situation that the guidance issued from the DOE on how to proportion the debt is a hornet’s nest and it keeps getting kicked down the road.

My spouse has also worked in Public Service for at least 8 years of the 10 years required for PSLF. At first, I’d submit a Employment Certification yearly and it would get kicked back to me with the note that there were no loans in her name. That is correct because the Consolidation loan apparently was in my name. So, we could be making progress toward her forgiveness as well, however it was prevented by the tracking system. Both of our incomes were used to figure the income based repayment, yet her loans apparently do not exist in the eyes of FSA until mine are forgiven, if and when that happens.

If this eventually goes through, my loans will be forgiven under PSLF and we have no idea what happens next. Will she get a Mohela account with her balance? Will we be able to submit about 8 years of Employment Certifications and get credit for those payments? She started her own private practice last year because we were led to believe that all our loans would be forgiven and she had the flexibility to leave public service. Will she have to leave her practice and go back to a community non profit or government job to get the remaining two years of certified employment to get forgiveness? When the waiver expires in October, 2022 her proportioned loan will likely not be on the books yet. Will she be able to get credit for past payments under the waiver when we were both working in public service jobs?

The bottom line is this: We’ve carried these loans for about 30 years, through hardship deferments and through over a decade of public service. The rules are still unclear and we are stuck in an administrative hold with no communication from the DOE or FSA. Had we known this, my spouse could have stayed in her nonprofit job thru the pandemic pause and she would have exceeded the 120 payments for PSLF. However, there is no loan for her to apply PSLF to at this time. If Congress passes the consolidation act, we will be able to separate our loans and I guess that is good. However, we’ve operated under the assumption for years that my public service work was being applied to the consolidated loan. Fedloan, DOE or FSA never provided any guidance to us. As part of the consolidation legislation, these past periods should be applied to loans when they are separated, including waiver benefits.

I know this is minutiae, but it is very important to those of us stuck in this system. However, getting attention to this at the legislature level is nearly impossible.

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~Wes