Ask The Get Out of Debt Experts Public Service Loan Forgiveness Program

Can My Student Loans Be Forgiven Because I Was a State Prosecutor?

Written by Steve Rhode

Question:

Dear Steve,

Law school student loans totaling over $150,000. I worked as a state prosecutor in Florida for 5 + years under the assumption that law school loans would be forgiven under the public service provisions of the William Stafford act.

Loans were previously consolidated with the federal government. I am since employed as an attorney with a private insurance company and have had my wages garnished at $300+ every other week which is causing quite a strain on my finances.

Is there a way to stop the wage garnishment and enter into a payment option that is affordable and allows me to get back on track with improving my credit?

Brandon

Answer:

Dear Brandon,

If your student loans were consolidated, then then payments while consolidated would count towards the 120 required to forgive your loans. That is, as long as you made the regularly scheduled loan payments either through the consolidation or on some income based repayment program at the time.

[documentcloud url=”http://www.documentcloud.org/documents/2951767-Public-Service-Loan-Forgiveness.html” sidebar=false text=false]

It sure sounds as if your former employment would qualify. I doubt your current employment would meet the requirements. So this means you would only have had 60 or so qualifying payments if you had consolidated the loans before or when you took the public service job and if you made all your payments on time during that job as a prosecutor.

So the good news is if you wanted to go back into some public service or nonprofit field, you could earn credit for the remaining payments necessary to qualify you for the Public Service Loan Forgiveness program. The 120 required payments don’t need to be consecutive.

You do have a one shot option of rehabilitating your loans and stopping the wage garnishment. See The Easiest Way to Stop a Student Loan Wage Garnishment. Talk to your servicer about getting you on an income driven repayment plan as part of the rehabilitation process. In fact your payments for rehabilitation will initially be calculated using a formula of 15 percent of your discretionary income.

Discretionary income is the difference between your income and 150 percent of the poverty guideline for your family size and state of residence.For Income-Contingent Repayment, discretionary income is the difference between your income and 100 percent of the poverty guideline for your family size and state of residence.The poverty guidelines are maintained by the U.S. Department of Health and Human Services and are available at www.aspe.hhs.gov/poverty.

Stopping the default and wage garnishment will help to improve your credit since you will no longer be reported in default. However the past late payments will continue to be reported on your credit report.

READ  Department of Education Keeps Backing Up to Run Over PSLF Again and Again

But improving your credit also involves having good credit reported as well. Stopping the bad credit is not enough to rapidly boost your score. See this or this.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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