OKLAHOMA CITY - There is a window of opportunity for student loan borrowers who either previously thought they were not eligible for the Public Service Loan Forgiveness program.
This week, the U.S. Department of Education unveiled it's 'Temporary Expanded Public Service Loan Forgiveness' plan. Congress has allocated $350 million to offer forgiveness to student loan borrowers who meet all requirements for the program except that they were enrolled in graduated or extended repayment plans, which are ineligible for relief.
To qualify, borrowers still need to have a loan from the Direct program and need to have made all of their payments in full and on-time. They are also required to have worked 10 years in a public service job. We are told the plan will be given out a "first-come, first serve" basis.
April Jordan with the Federal Student Aid Communications said this kind of plan could potentially help out borrowers like Dr. Danny Shipka, a professor at Oklahoma State University. Shipka said he owed about $43,000 in student loans, most of which were accumulated from his undergraduate and graduate careers at OSU.
Shipka said he started with small repayments after graduating from OSU in 1991 but he was on a deferred payment plan after earning his masters in 2003. Working as a professor at a public university, he thought was eligible for the Public Service Loan Forgiveness (PSLF) Program.
"Hunky dory. I thought everything was going great," Shipka said. "I was excited that I didn’t have to repay my student loans back because it was about $350 bucks a month. I have Parkinson's, so I can certainly apply that to my medical bills."
However, he was told in January he was on the wrong program. He said he was told he should have, instead, been on an income-based program and would spend another 10 years repaying.
"I was like 10 years?! He was like, yeah… nothing’s counted. So, my world ended that day," he said. "It’s a great idea for a plan. It’s great to help teachers, fire people, people that are going into public. I think, too many times, we denigrate them, but there’s no benefit to them if it’s structured liked this."
News 4 first reached out to the U.S. Department of Education in January for answers. We were told our questions could not be answered until a Certification of Identity and Consent was completed. We did not hear back from a press spokesperson until April and finally received clarification on Shipka's loan status on Wednesday.
According to the U.S. Department of Education, Shipka was on a 'Standard Plan' between January 2008 and April 2008. This does qualify from PSLF, but he then moved to a Graduate Repayment Plan and Extended Graduated Repayment Plan. Neither plans qualify for public service loan forgiveness.
Jordan also tells us their records indicate Shipka did not submit every payment on time or in full every month.
We asked whether Shipka was ever warned he was not on the right plan. We were told, "according to service records dating back to September 2003, the first instance of Mr. Shipka requesting PSLF is November 2017. At that time, his federal student loan servicer transferred this account to FedLoan Servicing, the exclusive PSLF servicer."
When asked what happens to the money he already paid, we're told "payments have been applied to paying down the principal and interest on his loan(s)." Essentially, the money he paid will go towards his loans but he still owes his balance.
Jordan explained because Shipka took out 15 different subsidized and unsubsidized loans during both his undergraduate and graduate careers, it's unclear exactly how much he paid back. Their office also claims Shipka only requested to be working towards forgiveness in November 2017.
Shipka said he recommends students to carefully read any loan program they sign up for, in order to know whether they truly qualify.
Everything you need to know about the limited-time program can be found here.