For many borrowers with federal student loans, eliminating debt — whether through forgiveness or paying off loans — can feel unrealistic. We encounter this daily at Summer: stressed and disempowered borrowers who are shouldering high balances and unaffordable monthly payments while also attempting to make sense of disinformation from loan servicers.
And as Richard’s story shows, we do whatever we can to help those borrowers get on the path to financial wellbeing.
Richard first started working with Summer last fall after learning about our online student loan assistance solution through the American Federation of Teachers (AFT). At the time, Richard, who has taught qualitative research in higher education for over 50 years, had over $93,000 in debt from loans he took out back in the 80s and 90s. His original balance had been roughly $99,000, so despite making payments for decades, his outstanding balance had barely budged.
The worst part? As a full-time educator at a nonprofit institution, Richard has met one of the main criteria for Public Service Loan Forgiveness (PSLF) for many years. Under PSLF, a borrower has to work full-time for a qualifying nonprofit employer and make 120 qualifying monthly payments; after that, their remaining loan balance is forgiven tax-free.
However, even though Richard had the right type of loan for PSLF after consolidating his loans in 2001, his monthly payments weren’t PSLF-eligible since he wasn’t on an income-driven repayment plan. So instead of receiving forgiveness in 2017, a decade after the launch of PSLF, Richard was still making loan payments.
On top of this, Richard and his wife Lorraine encountered obstacle after obstacle whenever they tried to get on the path to forgiveness or, at the very least, affordable monthly payments. “Every time we tried to follow the rules and get in the right forgiveness plan or make the payments manageable, the loan situation got worse — it cost more monthly, people were rude, and no one would give us straight answers. Two different companies “lost” our records or were accused of “fraudulent” practices, but not only could no one make the wind shift in our favor, no one wanted to — until Summer,” Lorraine shares.
“Every time we tried to follow the rules and get in the right forgiveness plan or make the payments manageable, the loan situation got worse — it cost more monthly, people were rude, and no one would give us straight answers.”
It’s understandable that Richard and Lorraine believed that student debt would always be a part of their lives. Borrowers need support and accurate information they can trust when navigating the student loan experience, and the couple had received neither until AFT connected Richard with Summer in October 2021.
Around that same time, the Department of Education announced a Limited PSLF Waiver that expands the program’s stringent eligibility requirements through October 31, 2022. Under the waiver, payments that hadn’t previously counted towards PSLF because of the loan type(s) or repayment plan(s) were now PSLF-eligible. This meant millions of borrowers were now eligible for forgiveness, including Richard.
“ ... not only could no one make the wind shift in our favor, no one wanted to — until Summer.”
Of course, the Limited PSLF Waiver brought about a new set of complications – how would Richard submit previously ineligible payments? Along with Summer’s digital PSLF tool, our Borrower Success team worked closely with Richard to help him take advantage of the Limited Waiver. Rejections and disinformation are unfortunately quite common in this space, and we know how frustrating this can be for borrowers and their employers. Our loan experts directed Richard to correct information whenever FedLoan Servicing, his loan servicer, provided conflicting messages, and we gave Richard and Lorraine guidance on how to advocate for payment recounts so his account would be up-to-date.
“Every time we were about to give up, they assured me we were doing the right thing and to hang in there, they would stick with us AND THEY DID, ” Lorraine writes.
With Summer’s automated PSLF solution and expert support, Richard’s $93,000 in loans had been completely forgiven and the couple got over $10,000 in refunds in May 2022. “At 80 years old, Richard is retiring August 1, 2022 after teaching qualitative research in higher education for over 50 years. The greatest gift we could have imagined came our way this month thanks to Summer, and a little help from the Federal Government.”
“We’re honored and so pleased to have helped Richard achieve loan forgiveness. Richard is not alone in his long fight for well-deserved loan relief, and it’s alarming how many borrowers are in the same boat,” says Bridget Haile, VP of Client Experience and Operations at Summer. “Thankfully, the Limited Waiver offers many a much-needed lifeline. Since the Waiver expires soon, HR leaders in the nonprofit or public sector should adopt a student loan situation as soon as possible to help employees eliminate or reduce their student debt.”
Interested in bringing student loan relief to your employees with a turnkey, digital PSLF solution? Schedule time with a solutions specialist to learn how Summer can help you stay ahead of PSLF changes and take advantage of the Limited Waiver before October 31st.