When the Public Service Loan Forgiveness program (PSLF) started in 2007, mental health professionals all over the country expressed optimism and relief. Student debt is crushing younger mental health professionals — hear two stories, in their own words, here. The PSLF program promised those working in nonprofit agencies and in public service that if they just stuck it out for 10 years, the remainder of their direct student loans would be forgiven.
Any kind of mental health work is challenging, but nonprofit clinics and public systems are notoriously difficult to work in. They offer low pay, low-functioning clients, a ton of paperwork, and often, little support. It’s no wonder that many counties struggle to fill those jobs at all.
For those clinicians who experience the work as a calling, though, the PSLF program offered a lifeline. It would be a reward for staying put in positions that most therapists understandably leave. For those who otherwise faced a possible lifetime of debt, PSLF suggested a way out.
It’s not going well so far.
According to this report and gut-punch followup from NPR, more than 99% of PSLF applications have been denied so far.
Many of those denials have resulted from applicants working in non-qualifying positions. 501c3 nonprofits are in, while 501c6 nonprofits are apparently out, which led some 501c6 employees to sue.
Other denials resulted from applicants not living up to the strict application and annual reporting requirements. Borrowers trying to qualify must make 10 years of on-time payments, and have their employment certified by the employer on an annual basis.
And still other denials came from applicants who were trying to qualify for PSLF, and simply were put into the wrong type of loan repayment program. That was a big enough problem that Congress created an emergency fund this year to try to fix it.
The good news is that the program still exists (despite threats to kill it off entirely), and is indeed paying off loans for those lucky few applicants who have made it through. The bad news is that the requirements to qualify remain both strict and burdensome, meaning that if you want to qualify for the Public Service Loan Forgiveness program, you need to make absolutely certain you’re living up to the requirements with each loan payment and each employer certification.