Insider’s experts choose the best products and services to help you make informed decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.
- Micah H., 33, majored in social work at the undergraduate and graduate level.
- She knew she would pursue a career in the nonprofit sector, where she could get her six-figure student loan debt forgiven through PSLF.
- But Micah still decided to repay her loans on her own for three reasons.
The Public Service Loan Forgiveness Program helps public servants who work for nonprofit, government, or tribal organizations get their student loans forgiven after 10 years of qualifying payments. The limited PSLF waiver, which expired on October 31, helped 236,000 civil servants get their student loans forgiven. Before that, however, only 2% of eligible civil servants who applied for the PSLF actually received the relief they were promised.
Civil servant Micah H., who asked Insider not to use her last name to protect her privacy, didn’t want to take a chance on PSLF at all.
While in college and graduate school studying social work, the 33-year-old knew about PSLF and planned to use the program to pay off her six-figure student loan debt on any line. However, after four years of working for New York City and seeing his co-workers get kicked out of the PSLF, Micah decided to refinance his federal student loans with SoFi to reduce the interest rate from 6% to 4% and repay itself.
Each year, after making additional payments on top of the monthly minimums, Micah would refinance his student loans again to lower the interest rates even further. By May 2020, Micah had paid off his entire balance – $115,355 in student loans.
There are three reasons why she decided to skip PSLF altogether and repay her student loans on her own.
1. She saw her eligible colleagues get rejected for PSLF
“At the time, I didn’t see a lot of people getting their student loans paid off,” Micah says. “So for me, that was a very big concern.”
A 2021 study by the Education Data Initiative shows that 30.7% of applications are refused due to incomplete documentation, while 35.2% of applications have not yet been processed. Micah didn’t want to go through 10 years of service and paperwork only to be turned down in the end.
Micah says, “I had to do a temperature check of the environment. No one gets forgiven for their loans, and I can’t risk waiting, holding my breath, and finally feeling this great feeling. of regret. So I said, ‘Micah, trust yourself. I just didn’t want to sit in my cubicle for 10 years and they ended up being like, ‘Oh no, that won’t work.'”
2. Micah didn’t want to limit his career options to nonprofits.
Micah told Insider, “At the time, I had probably been in PSLF for three or four years, but then I thought, ‘If I could do it myself in three years, do I want to really stay in this field for my career? just to get paid?”
To qualify for the PSLF, you must make 120 qualifying payments while working for a nonprofit, government, or tribal organization. You must also work for an eligible employer when you apply for and receive student loan forgiveness. Micah wanted to expand his career options outside of the nonprofit world.
She says, “In May 2020, I made my last payment. And that gave me the freedom to go to another work environment. If I’m challenged or just want to do something else, then I can do it. It’s the freedom I give myself.”
3. She didn’t want her student loans to weigh her down for the next six years.
During his debt repayment journey, Micah just wanted to be done with his student loans. She began repaying her loans as a freshman in college in 2007. She waited until she finished paying off her undergraduate student loans before going to graduate school at Columbia.
She had six years left in nonprofits until she could qualify for a remission from the PSLF, but she didn’t want her loans to weigh on her head for so long.
She says: “I was so sick of talking about student loans. I need this done. I have other goals I want to achieve. I want to increase my investment portfolio, get additional properties . I want to travel. I want to own one day.”
After being debt-free in May 2020, Micah and her husband, Demetrius, bought their first home in Maryland, where they planned their wedding and welcomed their first child. She now shares her financial journey on her YouTube channel, Adulting with Micah.
Even though other reforms are underway to help public servants get their student loans forgiven, Micah told Insider, “As someone who has spent the last 13 years paying off student debt” – including the payments she made while studying – “it’s exciting to see others receiving student loan forgiveness. For those who won’t, I hope my journey as an individual inspires others to begin their debt-free journey.
#Reasons #Nonprofit #Worker #Decided #Skip #Civil #Service #Loan #Forgiveness #Pay #Student #Loans