The headlines were wrong, but fear equals clicks. Toward the end of 2018, all the headlines spoke about “The Evil Government Lied!” and “No Forgiveness of You!”. Ok, I made those up, but they are not that far off. Most headlines said, “The government had denied 99% of student loan forgiveness requests.”
With every lousy headline, there is some truth. The sad truth is that the PSLF program is complicated, your loan servicer is no help, and most people are making critical mistakes.
Now, in mid-2019, a ray of hope is shinning. The Department of Education has released March numbers showing that a 52.5% approval rate. There were 2,181,000 applications filed in March and 1,148,911 approved.
In an attempt to be 100% transparent, these were not final requests, but employment certification forms submitted. In other words, it wasn’t final approval, but a sort of mid-course check-in being approved.
Deeper Into The Numbers
Taking a more in-depth look at the number, we can see why some were denied. The Department of Education denied 60% of applications due to missing information. Reasons for this denial could be a simple as a missed signature or a portion of the form not filled out completely.
Another 20% were due to ineligible loans. Sometimes this error can be fixed, other times it cannot.
As we can see, a vast number of rejections should easy to fix.
What About Forgiveness Requests?
In March the DOE rejected 85% of forgiveness applications. These were people that believed they had met the qualifications and requested forgiveness. In total, only 518 of 86,006 were approved.
This is also good news. It shows a jump in approvals of a substantial amount. From 1% to 15% is a gigantic leap forward. Of those denied, 53% were due to not meeting the 120 months of qualified payments. This could be because they consolidated or went on a forbearance during the past ten years. Another 25% had missing information.
What To Expect
There is no reason to expect this positive trend to stop. Even though only 15% were approved in March, it is a very positive sign that over 52% of people were submitted an approved Employee Certification form. These will all become approved forgiveness application in the future. The other 47% now have an opportunity to correct the mistakes they are making.
I see no reason to believe anything other than these numbers will get better. October through December of 2018 was the low point and month from here on out we will see a continued increase in the number of forgiveness applications approved.