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Show me the Money! Loan Forgiveness Part 2

January 9, 2015

Most SLPs are swimming in the sea of debt. The debt we had to incur in order to achieve our dreams of becoming Speech-Language Pathologists (SLPs).

If you’re a school-based SLP working directly for a school district, you may be eligible for loan forgiveness.

With that being said, I am NOT an expert. I am NOT a financial planner. But, I AM a SLP who is looking for ways to assist with repayment of hefty doctoral loans.

My first blog post on how I received the $17,500 loan forgiveness for highly qualified special educators has received a lot of attention. However, I think it’s important to know that there is another type of loan forgiveness out there and you need to be sure you know your options, how to qualify, and to be your own best advocate.

Be aware of when your loans were first borrowed and what the restrictions are for both of these loan forgiveness plans. Unfortunately for some, you may have taken out loans prior to the date in which loan forgiveness is provided.

It is vital that you know how much your loans amount to (I’m sure you already do!) and what your repayments options are. Many years ago there was only the option of a 10 year standard repayment plan. Now, with increased interest rates, there are several options for repayment including extending the years to 20 or 25 depending on the type of payment plan.

Besides the standard repayment you can:

  • Graduated Repayment Plan-
    • Up to 10 years
    • Payments are lower at first and then increase, usually every 2-3 years
  • Extended Repayment Plan- 
    • Up to 25 years 
    • Payments may be fixed or graduated
  • Income Based Repayment- 
    • Up to 25 years
    • Your payments change as your income changes
  • Pay as You Earn Repayment- 
    • Up to 20 years
    • Your payments change as your income changes
  • Income Contingent Repayment- 
    • Up to 25 years
    • Your payments change as your income changes
  • Income Sensitive Repayment-
    • Up to 10 years
    • Your payment changes as your income changes
There is more information about these repayment plans. The link is at the end of this post. 
Another way for school-based SLPs to receive loan forgiveness is through the Public Service Loan Forgiveness (PSLF) Program. This program requires you to be making payments though the Income Based Repayment (IBR), Pay as You Earn, Income Contingent Repayment (ICR), or standard repayment plan. In addition, you must make 120 payments under the restrictions set forth. 
How do you decide which loan forgiveness program to work towards?
I, personally, think it depends on how many different loans you have (i.e., Undergraduate, Master’s, and Doctoral) loans. 
People tend to be secretive about money and how much they owe. I understand it’s very personal to discuss finances. When you owe money on student loans, it makes life that much more difficult! 
I will give you an example from my personal life:
I did not have any undergraduate loans (I was very fortunate to receive scholarships and had Florida Prepaid). When I went to grad school, I was not as lucky. 
I have been practicing for 10 years and am extremely fortunate that my interest rate on that loan is a mere 1.62% (crazy!!). When I went back to school for my doctorate, the loan went into automatic deferment and I did not touch it for 3 years. I owe about $12,000. My payments are extremely reasonable. 
After graduating with my doctoral degree I about had a heart attack when I realized the accumulated amount of my doctoral loans. I work in the school system, how can I possible repay this? I will be paying until I retire! Since I have been practicing in the schools for 10 years and the school qualified according to the federal government, I was able to apply for the $17,500 loan forgiveness while my loan was still in the 6 month grace period. I was thrilled to find out that I received the forgiveness after 4 times of applying. This amount was taken right off the top of the amount I owed which was over $85,000. 
Now I will begin repaying my loan as my 6 months of grace period has ended. When I found out how much my monthly payment is going to be, I about had a second heart attack. How can one afford this? I already work 2 jobs in addition to creating products on TpT to earn a little extra income. 
I found out because my husband and I filed our taxes as “married jointly” that my payment based on the IBR plan is based on our combined Adjusted Gross Income (AGI)–it was even more on the standard repayment plan. Unfortunately, in a two income household that does not make the payments affordable. Considering the time of year it is, I plan to file “married separately” to try and lower my monthly payments. It also does not help that this loan has a 6.8% interest rate. 
To consolidate or not, that is the question? Because my doc loans are all serviced by the same provider, there is no need to consolidate the loans. In addition, with the fact that my master’s loans have an interest rate below 2% it is definitely in my interest to keep these two loans separate. 
So, what’s the plan now? My plan is to begin paying my loan back. I hope to make the 120 payments and apply for the Public Service Loan Forgiveness. Will this still be around in 10 years, one will know until the time comes. But, I’m willing to take that chance! 
So, what should you do?
I cannot tell you what to do or how to do it. What I can do, is advise you to take in all the information and figure out which forgiveness plans will work best for your current, individual situation. 
It is important to know that if you are currently repaying your loans and apply for the $17,500 and receive it, you will have to start over to apply for the Public Service Loan Forgiveness. Your individual situation will help you to dictate which forgiveness route you will follow.

The one difference I note in the Public Service program is that there are no restrictions set forth regarding technical wording such as “highly qualified.” The wording is “Any federal government, state government, local government, or tribal government entity is an eligible employer for the PSLF Program. This includes the U. S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts (including entities such as a public transportation, public water, or public bridge
district, or a public housing authority).”  This offers additional opportunities for those whose schools do not qualify for the $17,500. This plan seems to offer more flexibility in qualifying. Again, this is a newer program, so the exact details how this will be truly implemented is unknown.

With that in mind, you will have to do some investigating. Call your loan servicer. Ask questions. Read the forums. Make sure you’re repaying your loans under a “qualifying plan” and advocate for yourself! 

Some helpful links include:

https://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness-common-questions.pdf

https://studentaid.ed.gov/repay-loans/understand/plans

I wish all of you the best in applying and receiving loan forgiveness in any capacity! Every little bit helps!! Good luck! 
~Lyndsey

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Filed Under: Uncategorized 3 Comments

Comments

  1. Mary says

    November 13, 2015 at 3:41 am

    I am so interested that you received the $17500 amount as an SLP. I keep going over the wording on the offical documents! Was this a reason it was initially rejected? Any tips?

    Reply
  2. Unknown says

    January 19, 2016 at 7:11 pm

    I will be completing my 5th consecutive year in a low-income school system this June. I plan to attempt application for the $17,500 loan forgiveness and was hoping you could give me an idea of the timeline you face. What was the turnaround response time once you submitted your application (rejected or accepted)? Did you simply re-apply the same paperwork each time or alter your documentation to better fit the applicant criteria as a school-based SLP?

    Reply
  3. Unknown says

    January 19, 2016 at 7:11 pm

    I will be completing my 5th consecutive year in a low-income school system this June. I plan to attempt application for the $17,500 loan forgiveness and was hoping you could give me an idea of the timeline you face. What was the turnaround response time once you submitted your application (rejected or accepted)? Did you simply re-apply the same paperwork each time or alter your documentation to better fit the applicant criteria as a school-based SLP?

    Reply

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