PSLF Program Gets $350M Boost From Spending Bill

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  • PSLF Program Gets $350M Boost From Spending Bill
Author: Joseph Reinke, CFA

Joseph Reinke, CFA, CEO of FitBUX

Last week, President Trump signed a $3.1 trillion spending bill. The bill included a one-time $350 million expansion for student loan borrowers seeking public service loan forgiveness (PSLF).

(For more details about PSLF in general, we wrote detailed articles here.)

Not much is known about the process yet, but here is what we know:

1- It’s a first-come, first served deal.

2- It’s intended for those that mistakenly chose or were misled into the wrong repayment options thus not qualifying for PSLF.

Here is an example of who would qualify:

Mike began working for a non-profit hospital 10 years ago (the actual name has been changed to protect Mike’s true identity). Mike chooses to go on an extended graduated repayment plan for 25 years.

He thought he would qualify to have his student loans forgiven after ten years because he works at a non-profit company. His loan servicers, which over the ten-year span changed multiple times, each reassured him that he would qualify.

When Mike submitted the paperwork for loan forgiveness after working for 10 years, he was told by the government that he doesn’t qualify because the student loan repayment plan he chose, the graduated repayment plan, does not qualify for loan forgiveness.

The $350 million is there to help Mike and others in similar situations.

Mike’s story also highlights two important points. First, make sure you are on the right repayment plan if you are going for loan forgiveness and second, don’t wait ten years to submit the paperwork.

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Joseph Reinke, CFA

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About the Author

Joseph Reinke is a Chartered Financial Analyst (CFA) Charter Holder and founder of FitBUX which has helped over 14,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old.

In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.

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