Question:
Dear Steve,
I took out 80k. I have been paying my loan consistently for 20 years. I applied for teacher repayment but was denied because my loan was pre 1998. I graduated in 1996. I just attempted to apply for the Public Service Loan Forgiveness program, but was told that I do not qualify bc my loans are not eligible (they are with Texas Guaranteed).
I can consolidate now and make them eligible in 10 years. I actually did consolidate them in 1999, but did not know at the time I should have done a particular type of consolidation. So my question is do I wait out the 10 years, do an income based repayment or try to refi. At this point, I am finally hitting principal and seeing the number drop below the original 80k. Its just now at 68k. I feel this is pretty crappy since I have been paying $600-700/month for 20 years on a teachers salary. The Income based repayment would Income-Based Repayment 8 months @ $156.60; 117 months @ $840.47; 6 months @ $462.75 Does not seem like a good option?
Are there any other viable options available to me?
Jennifer
Answer:
Dear Jennifer,
For some teachers it’s worth investigating the Teacher Loan Forgiveness Program and the Public Service Loan Forgiveness Program.
But in your particular case it is correct that the teacher forgiveness is only for loans after October 1, 1998.
To be eligible for teacher forgiveness you would have to meet some strict hurdles and then the maximum forgiveness available is currently $17,500.
At this point the logical route would be to consolidate your loans into a new Direct Loan and elect an income driven repayment plan to repay that loan. You would then need to make at least 120 more payments to be considered eligible for the forgiveness of the balance of your loans.
Right now the PSLF program is a mess and by the time you are eligible for forgiveness let’s just hope they get their administrative act together at the Department of Education.
To get the least bit of assurance your current employer would maybe qualify under the PSLF program I would advise you to fill out the PSLF Employment Certification Form as soon as possible.
