FAFSA loans in default - lost PSLF credit during COVID pause despite nonprofit job

I'm so sorry you're dealing with this. The PSLF rules during COVID were confusing but you're right - loans in default didn't get PSLF credit during the pause. However, there might still be options for you:\n\n1. If you haven't already, apply for the Fresh Start program immediately. It can bring defaulted loans back into good standing and potentially make your employment retroactively count for PSLF.\n\n2. For the borrower defense denial, you can appeal but be specific that you're requesting the approved claim amount be applied to your current outstanding loans.\n\n3. Given your age and financial hardship, you might qualify for a Total and Permanent Disability discharge - have you looked into that option?\n\nThis is absolutely worth fighting. The FSA has been directed to be more flexible with PSLF recently.

Thank you for these suggestions. I did apply for Fresh Start back in November and my loans were moved from DEFAULT to current status, but when I called to check on my PSLF progress they told me those 3+ years still wouldn't count because I was in default during that time, even though nobody was required to make payments! It feels so unfair. I hadn't thought about disability discharge - I'm not technically disabled, just older and exhausted. Do you know if there's a specific appeal form for the borrower defense denial? I just got a generic rejection letter.

same thing happend to me with the PSLF stuff. got a job at a hospital in 2019 and none of the covid time counts bc my loans were defaulted. its such BS when NOBODY was making payments anyway!!!!!

Actually, the requirement wasn't about making payments - it was about being in

Wait I'm confused about the borrower defense thing. If you already paid off the loans for the school that qualified for forgiveness, why would they give you money back? Isn't borrower defense only for loans you still have?

No, that's actually a misconception. The Borrower Defense to Repayment program can provide refunds for amounts already paid if your claim is approved. The Department of Education is supposed to provide relief that can include refunds of amounts previously paid, especially if you had multiple loans. The system isn't always applied consistently though, and many borrowers have to appeal initial decisions.

Oh I didn't know that! I thought it was just for loans you still had. That makes the denial even worse then.

I finally got through to someone at FSA after like 20 calls about my PSLF issue and they actually fixed it and counted my time! Have you tried using Claimyr? It's this service that helps you skip the long hold times when calling Federal Student Aid. I was skeptical at first but it worked - got me through to a real person in minutes instead of hours. They have a video showing how it works at https://youtu.be/TbC8dZQWYNQ and the site is claimyr.com. Worth it after I wasted days trying to get through myself.

I hadn't heard of this service. After spending literally hours on hold multiple times I'll try anything at this point. Did they actually help resolve your issue or just get you through to someone? I'm worried about getting another FSA rep who just reads from a script and won't actually help.

They just get you through to FSA faster - after that it depends on who you get. But I found that when I wasn't frustrated from waiting on hold for hours, I was better at explaining my situation clearly. Ask specifically for a PSLF specialist when you get through. And have all your employment certification forms ready.

The injustice of the student loan system is infuriating! I'm in a similar situation with PSLF but not as far along as you. What particularly bothers me about your situation is that during COVID when EVERYONE got payment pauses, those in default got punished by not receiving PSLF credit. That makes no logical sense when the entire point of the pause was to help borrowers.\n\nI would suggest writing to your Congressional representatives. I've seen several cases where PSLF issues got resolved after a Senator's office made inquiries. Congressional caseworkers can often cut through bureaucracy that seems impenetrable to us.\n\nAnd definitely appeal the borrower defense denial. The system should recognize you've been harmed regardless of which specific loans you've paid off.

That's great advice about contacting my representatives. I hadn't thought about that route. I'll try reaching them this week. The irony is that if I hadn't been working at a qualified employer during COVID, I wouldn't be so upset - but I was literally doing everything right except for the default status that I didn't even know about since nobody was required to make payments!

I want to clarify something important about PSLF during the COVID pause that might help your case.\n\nWhile it's true that loans in default don't normally count toward PSLF, the CARES Act and subsequent extensions created special provisions. If you consolidated your defaulted loans through the Fresh Start initiative, you may be able to retroactively count that employment time.\n\nSpecifically, check the FSA website section on \

This is EXTREMELY helpful information! I did use Fresh Start but the representative I spoke with didn't mention anything about retroactive counting for PSLF. I'll specifically ask about this provision when I call again. And I'll look into the SAVE plan right away - if I could get my payments lower than 15% that would make a huge difference in my monthly budget. Thank you!

i tried the SAVE plan and my payments went from 15% to like 5% of my income its a HUGE difference u should definitely apply!!!

The whole system is designed to keep us trapped in debt forever. I'm 58 and will never escape my student loans. They've made more from interest than I ever borrowed. It's legalized theft.

I hear your frustration. Have you looked into Income-Driven Repayment forgiveness? After 20-25 years (depending on loan type), remaining balances can be forgiven. The new SAVE plan also has shorter forgiveness timelines for smaller original loan balances. And income-driven payments adjust based on your income - if you're near retirement and your income drops, payments would too.

I've worked as a financial aid counselor, and one strategy that might help you is submitting a detailed appeal letter for your borrower defense claim. Specifically request that the Department apply the value of your successful claim to your other outstanding federal student loans.\n\nYou should also submit a complaint through the FSA Feedback System (studentaid.gov/feedback-center/) about both issues - the PSLF COVID time not counting and the borrower defense determination. Be very specific about dates, loan servicers, and previous communications.\n\nIn my experience, the squeaky wheel gets the grease with these bureaucratic systems. Document EVERYTHING, get names of representatives you speak with, and follow up repeatedly.\n\nRegarding your age and difficulty continuing work - there are provisions in income-driven plans for extraordinary circumstances. Request an income recalculation based on current income rather than prior year tax returns if your situation has changed.

Wait does that actually work? Filing a complaint through the feedback system? I thought that was just to make us feel better but nobody actually reads those lol

Yes, complaints through the official FSA Feedback System are actually reviewed and can lead to case escalation. It creates an official record that can be referenced in appeals or future communications. It's much more effective than just calling repeatedly and speaking to different representatives each time. Always request a case number for any complaint you file.

Thank you for this insider perspective. I'll definitely file through the feedback system. Should I file separate complaints for the PSLF issue and the borrower defense issue, or combine them into one complaint?

File them as separate complaints to make sure each issue gets proper attention. And one more suggestion - the PSLF Waiver that ended in October 2022 had provisions that might have helped your situation, but there's a lesser-known program called the IDR Account Adjustment that's still ongoing. This adjustment is reviewing accounts and may retroactively count some periods of forbearance/deferment toward forgiveness. \n\nThe deadline for consolidation to benefit from this has been extended to April 30, 2024, and you don't need to take any action if your loans are already Direct Loans. This could potentially help with some of your time in default as well.\n\nYou can read more about it here: https://studentaid.gov/announcements-events/idr-account-adjustment

Thank you so much! I hadn't heard about this IDR Account Adjustment at all. My loans are already Direct Loans so it sounds like I might automatically benefit from this. I'll read up on it right away.