Servicers other than FedLoan don’t handle PSLF

I’ve heard a few stories of attendings calling their servicers after making years and years of payments to get started filing for PSLF and being laughed off the phone because of their high salaries.

To be clear, PSLF has no maximum salary.

The master promissory note you signed says this:

A Public Service Loan Forgiveness (PSLF) program is also available. Under this program, we will forgive the remaining balance due on your eligible Direct Loan Program loans after you have made 120 payments on those loans (after October 1, 2007) under certain repayment plans while you are employed full-time in certain public service jobs. The required 120 payments do not have to be consecutive. Qualifying repayment plans include the REPAYE Plan, the PAYE Plan, the IBR Plan, the ICR Plan, and the Standard Repayment Plan with a 10-year repayment period.

PSLF is all about months of qualifying payments made for qualifying loans while working full-time at a qualified employer. As of now (and probably never for old/current borrowers), there is no “means test” to see if you still deserve to have your loans forgiven even though you’re a “rich doctor.”

Furthermore, the only servicer that handles PSLF is FedLoan. When you submit your first employment verification form (which the Feds recommend doing annually), you’ll be switched to FedLoan if you weren’t already with them by chance.

The other servicers—and probably especially Navient (currently being sued by the federal government for defrauding and misleading borrowers)—have a vested interest in keeping you on the rolls so that they can continue to make money off your payments. When you call the servicer, you’re getting some random employee who is probably making around twelve bucks an hour whose primary role is to provide customer service and troubleshooting with the website, not provide good financial advice. They are much much more likely to deal with somebody on the phone trying to get out of delinquency or default than they are to talk to somebody who is approaching 10 years of payments and is ready for public-service loan forgiveness. Despite the government stating that customer service is a priority, the servicers essentially have no fiduciary duty to work in your best interest.

Since the first loans won’t be forgiven until October 2017, no one can guarantee that there won’t be attempts to limit the damage from the somehow-unexpected popularity of this program, but that hasn’t happened yet and is likely to take some time to occur. Do not take your servicer seriously on this if you think you should otherwise qualify. Just get the paperwork filed out and submit it. Worst thing that happens? Your servicer is changed and you have to set up autopay again.

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