A friend was recently sent an email from US Department of Education that told them they're eligible to have their student loans discharged, but they don't think they should be eligible yet. Has anyone else had this happen? What happens if the Department of Education made a mistake on the dates?
Student Loans discharged early?
byu/TreeTravel04 inStudentLoans
Posted by TreeTravel04
2 Comments
Unfortunately this seems to be a common glitch in the latest batch of golden emails. Your friend may be a part of it.
There’s been Old/New IBR eligibility problems since the one time adjustment and the creation of the IDR counter. It hasn’t caused a problem with forgiveness eligibility until now. Usually it was just borrowers seeing incorrect payment amounts and their data assigned to New IBR in the data. But this is obviously a potentially bigger problem.
The main issue seems to be with borrowers who consolidated their loans. It cannot actually change your eligibility, but there were multiple problems in the counter and IDR applications and with the servicers processing the applications in the last year or so. So now there is a lot of confusion and errors.
No one with less than 300 qualifying payments (25 years) is currently eligible for forgiveness. No one actually eligible for PAYE or New IBR (forgiveness at 240 payments/20 years) has possibly reached the required count yet. If you had loans before July 2014 then you don’t qualify for New IBR. If you had loans before October 2007 then you don’t qualify for PAYE. No borrower actually eligible for New IBR or PAYE has been in repayment for 20 years yet. Only borrowers on ICR and Old IBR at 300+ payments should be getting forgiveness.
So some borrowers are getting forgiveness on a plan that they should have never been put on.
Only time will tell how it will be handled. But my advice to borrowers would be this: if you know you are part of this error then be mentally and emotionally prepared for the possibility of the forgiveness being rescinded.
Forgiveness is currently being processed for these borrowers with no word about any issues. My hope is that these borrowers got lucky and the department just leaves it alone.
Honestly, I don’t know if we know what happens. I think a lot of people who have been getting the letters have no idea what it is or why.
If your friend hasn’t been following the student loan stuff in detail over the last few years they might not know about the payment count reset thay happened.
Also, there were some specifics about the payment count that you had to delve into. I did not realize realize I had more payments added because I was forced into forbearance instead of Income based payments. Many of us still paying on loans 25 years later are in that boat, so we likely had the year of consecutive forbearance or 36 months total to get a recount.