After years of public service, some still can’t apply for student loan forgiveness

A short-lived program in the early 2000s allowed married couples to consolidate their student loans at a lower interest rate. Now many are missing thousands of dollars in loan forgiveness.

Teachers, firefighters and government workers are clamoring to disentangle their student loans from those of their spouses in time to clear their debt with Civil Service Loan Waiver (PSLF). President Biden revamped the program last October, but in order to receive the benefits – including the cancellation of student loans after 120 eligible payments – borrowers must have their documents in October this year.

“We keep getting these notices about, ‘Hey, waiver of public service loan forgiveness, you might qualify. Try it,’” says Becki Vallecillo, a longtime kindergarten teacher in Anderson, SC.” And it’s heartbreaking every time.”

Vallecillo and her husband, Eric, found out early on that they didn’t qualify. As a kindergarten teacher and school counselor, she meets all the criteria, except one: her loans are consolidated.

She was on the phone several times with her loan officer. “The last time I did it, I was literally in tears at the end. I had spent about four hours on a Saturday getting transferred and bouncing back: ‘Go to this website, do this paperwork, talk to that person'” Vallecillo said. But the answer is always the same.

More than 14,000 borrowers combined their student loan debt in the late 1990s and early 2000s through a process called spousal consolidation. It offered borrowers the allure of a single monthly payment and a lower interest rate.

But there was a fundamental flaw: the program had no way to separate the original loans once merged. Even in the event of divorce or domestic violence, these debts cannot be unwound. Congress eliminated the spousal consolidation option in 2006, but never created a system for dealing with participating borrowers.

Today, many borrowers – regardless of their marital status – are missing thousands of humanitarian aid. In many cases, the combined debts exceed $100,000, and in some cases the couples owe more than $200,000.

Two Democratic lawmakers: Sen. Mark Warner of Virginia and Rep. David E. Price of North Carolina say they have a simple solution: change the wording and allow loan separation. They first introduced a bill to do so in April 2021, but since then the bill Joint Consolidation Loans Separation Act became embroiled in the broader debate over student loan forgiveness.

“I’m not saying you should just get rid of all student loans, which would be great, right? says Patrick Shattuck, an English teacher at Santa Ynez High School in California. “I just say, ‘Can I please pay my share?’ That’s all I want to do.”

Shattuck is divorced and still owes over $170,000 in combined debt to his ex-wife, the vast majority of which is not his.

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A few months ago after an NPR article looked at the program, affected borrowers began working together to coordinate their lobbying efforts. They formed a Facebook group, now with nearly 400 members from across the country, hoping to reframe the issue. It worked. Their efforts brought the bill back to the Senate with renewed hope in May.

“It’s almost like the minute this comes to the politicians’ attention, they’re like, ‘this is a slam dunk,'” Shattuck said.

But the invoice is already blocked again. And with the prospect of broader loan cancellation looming, borrowers and lawmakers are getting nervous.

“I want to cry because I’m like, ‘Oh my God, what have we done?’ “says Cynthia Malone. She is a licensed clinical social worker with the Office of the Public Defender in Columbia, Missouri. She works with the death row population and the appeals process to review claims.

She is married to a probation officer. Between them, they have decades of public service — and more than $110,000 in student loans combined.

Malone says the hardest part of their situation is watching co-workers with the same experience — but not spousal consolidation — have their debts forgiven. She feels left out because of a choice they made long ago at the behest of their loan officer.

But the confusion around PSLF is not limited to joint consolidation borrowers. A new estimate from the Center for Student Borrower Protection suggests that, of the 9 million borrowers eligible for the new PSLF waiver, only 2% have received relief.

Even if President Biden extends the PSLF waiver past October, to give borrowers more time to qualify, joint consolidation borrowers will continue to wait. The only thing that can change their situation is an act of Congress. Until then, Malone says she and her husband are trying not to think about all that debt too much.

When asked how their lives would change if they qualified for the PSLF, nearly all joint consolidation borrowers NPR interviewed wanted the same thing: a savings account.

They hope to start saving for the future, rather than paying interest on the past.

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