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Abstract

ew larger in May.So far, PSLF has forgiven almost $164,000,000 in student loan debt. Not bad for a program that has been decried as a “failure”.<figure id="603e"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*um_MFIHRvFHXm9f9Dr5lbg.jpeg"><figcaption>Table 2: Total amount of loans forgiven through PSLF.</figcaption></figure>Outside of an anomaly in January, the average loan balance forgiveness has been increasing over the past year or so, breaking$ 82,000 in May.Remember, that’s an average. That means many borrowers are getting six-figure student loan forgiveness already. And we are still in the early stages of this successful program.<figure id="b40e"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*a0bgA2YA6HHpocsM4hGqZg.jpeg"><figcaption>Table 3: Average loan balance for PSLF recipients.</figcaption></figure><figure id="2704"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*d1P_JMSlGIlAJnqKC3hbNg.jpeg"><figcaption>Chart 2: Average loan balance for PSLF recipients.</figcaption></figure>In short, PSLF is going great and getting stronger every month.If you are thinking about using this program for loan forgiveness, my best advice is to tune out the naysayers and run the numbers for yourself. PSLF will be around for a long time, so make the choice that’s right for you.<h1 id="841c">Servicer Shakeup</h1>I mentioned this in a <a href="https://readmedium.com/the-nightmare-facing-student-loan-borrowers-2e6700815a06">previous article</a>, but the <a href="https://www.ed.gov/news/press-releases/us-department-educations-office-federal-student-aid-announces-new-contracts-five-companies-improve-customer-service-increase-accountability">Department of Education quietly announced</a> that just 5 servicers were selected to be part of the next iteration of loan management. And of those 5, just 2 were from the original 9, MOHELA and Maximums.Nelnet and Great Lakes have officially confirmed that they were not chosen, with <a href="https://www.prnewswire.com/news-releases/nelnet-issues-statement-regarding-department-of-education-nextgen-business-pro

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cess-operations-proposal-301080806.html">Nelnet promising legal action</a> against the decision.<blockquote id="61b7">We are frustrated and disappointed by this decision and the lack of transparency in the process and will pursue every legal avenue available to ensure that students have the high-quality service they’ve come to expect from us. The federal student loan program is very complicated to administer, and to simply throw away the training and experience of Nelnet, Great Lakes, and our dedicated associates is a recipe for an implementation disaster that will negatively impact borrowers.</blockquote>All that being said, PSLF folks don’t need to worry about their loans changing hand. I did some digging and found that <a href="https://thecollegeinvestor.com/157/fedloan-servicing-the-worst-student-loan-servicer/">FedLoan Servicing</a>, aka PHEAA, had their <a href="https://www.penncapital-star.com/criminal-justice/with-their-contract-extended-pheaa-officials-suggest-improvements-to-controversial-federal-student-loan-program/">contract renewed in late 2019</a> for two years.Talk about a major relief for us <a href="https://readmedium.com/is-plsf-right-for-me-e06412fbf678">PSLF</a> folks!<h1 id="99a2">Related Articles/Resources</h1><ul><li><a href="https://readmedium.com/the-basics-of-public-service-loan-forgiveness-4f8df6aa16b1">The Basics of Public Service Loan Forgiveness</a></li><li><a href="https://readmedium.com/pslf-actually-works-and-i-have-the-data-to-prove-it-ab551bc75293">The Truth About PSLF</a></li><li><a href="https://readmedium.com/is-plsf-right-for-me-e06412fbf678">Is PLSF Right for Me?</a></li><li><a href="https://readmedium.com/in-defense-of-public-service-loan-forgiveness-729612ddfbb7">In Defense of Public Service Loan Forgiveness</a></li><li><a href="https://readmedium.com/how-to-hack-the-secretly-successful-pslf-program-d889256fd2ef">How to Hack the Secretly Successful PSLF Program</a></li></ul>I hope you liked the article. If you’re interested in staying up to date with the my latest stuff, click here to join my <a href="https://mailchi.mp/ff47c9d5c598/newlettersignup">e-mail list</a>.</article></body>

PSLF Update — July 2020

Approval rates skyrocketed this month.

(Photo by **Designecologist** from **Pexels**)

Here is the latest update on the Public Service Loan Forgiveness Program. Since there is a lag in collecting and processing the data, the report released in July 2020 only has data through May 2020.

(Note: For explanations of the data, please see the original article about parsing the PSLF reports.)

Approval Rate

May was a fantastic month for PSLF applicants. The monthly adjusted approval rate was took a huge leap from right around 5% to over 15%!

This may just be an aberration, and things will come back down to a lower, but still increasing, normal.

This could be the month where the PSLF program is finally starting to take off, shedding the early mistakes of the first cohort and becoming the saving grace of so many student loan borrowers.

Only time will tell.

Personally, I think it’s the latter.

Table 1: Approval rate for PSLF, including adjusted data.

Chart 1: Approval rate for PSLF, including adjusted data.

Forgiveness Amount

Continuing the positive news, both the total forgiveness amount and the average loan balance forgiven grew larger in May.

So far, PSLF has forgiven almost $164,000,000 in student loan debt. Not bad for a program that has been decried as a “failure”.

Table 2: Total amount of loans forgiven through PSLF.

Outside of an anomaly in January, the average loan balance forgiveness has been increasing over the past year or so, breaking $82,000 in May.

Remember, that’s an average. That means many borrowers are getting six-figure student loan forgiveness already. And we are still in the early stages of this successful program.

Table 3: Average loan balance for PSLF recipients.

Chart 2: Average loan balance for PSLF recipients.

In short, PSLF is going great and getting stronger every month.

If you are thinking about using this program for loan forgiveness, my best advice is to tune out the naysayers and run the numbers for yourself. PSLF will be around for a long time, so make the choice that’s right for you.

Servicer Shakeup

I mentioned this in a previous article, but the Department of Education quietly announced that just 5 servicers were selected to be part of the next iteration of loan management. And of those 5, just 2 were from the original 9, MOHELA and Maximums.

Nelnet and Great Lakes have officially confirmed that they were not chosen, with Nelnet promising legal action against the decision.

We are frustrated and disappointed by this decision and the lack of transparency in the process and will pursue every legal avenue available to ensure that students have the high-quality service they’ve come to expect from us. The federal student loan program is very complicated to administer, and to simply throw away the training and experience of Nelnet, Great Lakes, and our dedicated associates is a recipe for an implementation disaster that will negatively impact borrowers.

All that being said, PSLF folks don’t need to worry about their loans changing hand. I did some digging and found that FedLoan Servicing, aka PHEAA, had their contract renewed in late 2019 for two years.

Talk about a major relief for us PSLF folks!