There’s a long history to this story. You can read the start of it here. I’ve included a shortened version below, though.*
Mohela, which was my original loan servicer, has taken over managing PSLF for the government. Since I (re)filed for TEPSLF in April, I have been waiting for the DOE to transfer my loans and the application to Mohela, which will go over my payment history and decide if my loans can be forgiven.
I messaged Mohela before I came to Dublin, because the deadline for the TEPSLF application is the end of this month. While I have applied, I am paranoid that the application won’t transfer correctly. I need the agencies to be clear that I am asking for my original Direct Loans, the ones I’ve been paying back since 2007, be considered for forgiveness.
Mohela said they would get back to me with a tally of where I was on the PSLF payment calendar.
Yesterday, I woke up to a message that I had only made 14 qualifying payments on my small parent plus loan. In other words, Mohela still doesn’t have the loan information from DOE about the direct loans and that application.
So I logged in to DOE.
And it only said I owed my small parent plus loan.
This is either excessively good news OR excessively bad news.
Let’s take the good news first:
It could mean that my PSLF application has been approved and my direct loans have been forgiven. Under Biden’s new, small forgiveness plan, my parent loan would also be forgiven. I would be free, after paying back almost 68% of my original loan amount.
Here’s why I don’t think this is good news:
Mohela, the agency handling PSLF, never received that information, so how could my loans be forgiven.
Since I have paid more than 10 years, technically, the DOE owes me money for what I’ve overpaid. They’re supposed to tell me if that happened, but I have not heard anything from them in months (the last communication was basically “we got your PSLF application”).
The confusing loan history on the DOE site says my direct loans were zeroed out due to “consolidation.” If that’s what they think happened, then we’ve gone back to where I was last summer, owing the “new” consolidation loan: I’m worried that they aren’t acknowledging the de-consolidation.
And that’s why this could be exceptionally bad news.
If I’m starting over with a big consolidated loan, I could end up paying a quarter of a million dollars on that original 132,000 loan. I will never be free.
I’m also worried because Biden’s new, small forgiveness program is about to go through when I have no idea what my direct loan status is. If it’s in some weird limbo, if the DOE can’t see it for some reason, then I would miss out on the $20,000 in forgiveness I’m eligible for. (I would get the 3,000 parent loan forgiven, but miss out on the remaining 17,000 that could be applied to my direct loans, which, while I small drop in a large bucket, is still something.)
Here’s what I’m afraid of:
A giant consolidated loan will reappear after the TEPSLF deadline passes and after the new Biden forgiveness passes. The fact that my loans were de-consolidated will be lost, and I’ll be screwed.
Even though the DOE has been making my stomach hurt for years, there is a small ray of hope: if DOE thinks my loans are consolidated again, then my small parent loan shouldn’t be a separate thing I can see . . .
*In short, I paid back almost $90,000 of a $132,000 loan. For the first ten years, I was on the “wrong” kind of plan to get Public Loan Service Forgiveness (PSLF). So I switched plans. And then, the government temporarily expanded (TE) PSLF, so that earlier payments could count.**
Last summer, now owing $154,000 due to interest (yup–you read that right: after paying back about 90,000, I owe MORE than when I started). The form and someone I spoke to at DOE said to consolidate my small parent loan with my direct loans. I did. Then, I discovered that doing so made my loan brand-new, meaning the government would not count any of the 15 years of payments. I was starting from zero on the PSLF clock.
There was crying and vomiting and not sleeping.
I finally got the loans de-consolidated, which is a miracle, since that apparently never happens. Then, for several months, the DOE listed me as owing double–the original loans AND the consolidated loan amount.
When that got fixed, in April, I re-filed for TEPSLF. I’m waiting for an answer.
**Under the Trump administration, fewer than 1% of PSLF applications were approved. Those who were denied were not told how the decisions were made.
