Federal Student Loan Forgiveness Program: Public Service
What is it?
How do I get it?
The Straight Talk!
There is nothing worse that than to hear stories from clients who thought they did everything right, only to find out, ten (10) years later, that their forgiveness application was denied and their participation in the program was wholly unsuccessful. We do not want this to happen to our clients.
What you Need to Know Public Service Education Debt Forgiveness
Public Service Loan Forgiveness is a Federal Student Loan Forgiveness Program that only applies to those who have Federal Student Loans and work, full time, for a Governmental Entity or a Qualified Non-Profit. How it works is pretty straight forward. You work in the public or non-profit sector for 10 years, make payments for 10 years, and if the balance is not paid off in 10 years, the balance is forgiven. Seems straightforward. But it is not.
So let’s break it down to it’s essential terms.
First, you much have a qualified Federal Student Loan. Not all Federal Student Loans qualify for this program. If you have a student loan under the old student loan lending system, FFEL, they those loans do not qualify. The loans must be under the Direct Student Loan System.
The vast majority of borrowers who thought they had the correct type of loans were denied forgiveness because they had the wrong type of loan, were given the wrong information, and paid on their loans for 10 years, only to find out that their loans were not eligible.
The student loan borrowed must have worked full time for a qualified employer for the full ten years. The 10 years has to be cumulative, and not necessarily consecutive or with one qualified employer. Teachers can go from one school district to another, as an example.
The first step in this process is to have your Federal Student Loans reviewed by a Student Loan Lawyer to ensure that the loans are eligible student loans for Public Service Loan Forgiveness. The last thing you want to have happened is to pay on loans, and not have them be qualified. Our attorneys suggest obtaining your National Student Loan Data System report and have it reviewed by our office. This is the number one reason that countless public servants have had their forgiveness applications denied. DO NOT LET THIS HAPPEN TO YOU.
If a borrower has non-qualified student loans, FFEL, then they can be consolidated into the Direct Student Loan System. We can assist with this process. Once that is accomplished, then they become qualified loans and the ten year payment cycle begins to run. There is no credit given for payments made on non-qualified loans.
The student loan borrower has to make the qualified payments, on the qualified loans, while working full time for a qualified employer, in full, and on time. What this means is that a payment plan under the Direct Student Loan Program has to be established and complied with for 10 years, 120 consecutive, qualified payments, in full and on time. If payments are suspended for any reason, then the 120 months worth of payments is suspended. For an example, if the borrower requested a deferment or forbearance.
If the Federal student loans can be paid off within 10 years, then there is no reason for a borrower to participate in this program. However, if the balance cannot be paid off in 10 years, then the Public Service Loan Forgiveness Program will be a benefit to the borrower because the balance will be forgiven.
That being said, the borrower must enroll in an Income Drive Repayment Plan under the Direct Student Loan Program. These repayment plans are based on household size and household income, rather than the balance of the loans. These then become your qualified payments.
Income-Driven Repayment Plans
To enroll in an income-driven repayment plan, an application must be filled out and submitted to the student loan servicer. The two most important steps to ensure the forgiveness program works is that payments are made in full and on time, each month, and, the yearly recertification of the Income Driven Repayment Plan is completed. If the borrower fails to recertify, then the whole program is terminated.
Fed Loan Servicing
FedLoan is the proper service for the whole Public Service Loan Forgiveness program. We ensure that each of our clients who wish to apply for PSLF moves all their loans to FedLoan in order to obtain the proper credit for each payment.
Department of Education
FedLoan Servicing, P.O Box 790234, St. Louis, MO 63179-0234 (effective 7/1/19)
Yearly Employment Certification
Our attorneys encourage all our clients to certify their employment with FedLoan, each year. This is accomplished with submission of the application, signed off by the employer, and sent into FedLoan. Keeping a copy of each application as well as each year’s W-2 is an excellent way to ensure completion. When we do this for our clients, we establish a paper trail, and send everything registered mail, return receipt requested, retain a copy for our file and send one to the client.
When I am interviewing a client one question that is always asked is “What can I keep?” There is this fear in bankruptcy that you lose everything and that is simply not the case.
Everyone who files bankruptcy can keep their property so long as the value of the property falls within the limits of the Tennessee State Exemptions. This means that certain property is excluded from attachment by the creditors and the Bankruptcy Trustee.
The Exemption limitations are very specifically spelled out in the law and as a bankruptcy attorney, I want to make sure that you get to keep all the things you want. For an example, if you want to keep your car, and your car is paid off, then we really have to look at the fair market value of the car. If, however, the vehicle is not paid off, and the value is less than what is owed, you can keep the vehicle so long as you make the payments. If there is actual equity in the vehicle, then a detailed analysis has to be done, to include, establishing a dependable fair market value of the vehicle you wish to retain.
A Homestead Exemption applies to the equity you have in a parcel of real property that you live in, such as your home or your farm.
Again, there are limitations associated with the net equity you can claim as exempt in a parcel of real property. If the net equity of in the land exceeds the Homestead Exemption Limits, then a Chapter 7 Bankruptcy would not be a good option because the property would be at risk to be sold by the Chapter 7 Trustee. It does not mean Bankruptcy is not an option because a Chapter 13 Bankruptcy would be more appropriate in those circumstances.
There are also limitations to the amount of money that can be kept in a bank account, the amount of jewelry, and all other personal property.
How the Process Works
During the bankruptcy process, Attorney D.J. Rausa will review all assets as well as all liabilities to ensure that the client keeps all wanted property and that all the property falls within the limitation of the Exemptions.
Presently, the Exemption Limits on all personal and real property in the State of Tennessee are set low. Meaning that there is not a lot of protection. For an example, the limitation on a home that is owned by an unmarried person, under the age of 62 is only $5,000.00. In today’s real estate market, that value is typically exceeded. A chapter 13 bankruptcy would be the only viable option.
Changes in the Federal Bankruptcy Law
The Exemption Limits are in the process of being reviewed by both the State House and the State Senate. Two bills were introduced last year, SB 0399 and House Bill 0236. Both have been sent to the Judiciary Committee and are scheduled to be heard the first quarter of 2020.
Our Veterans who have a service-connected disability can apply for a total Federal Student Loan Forgiveness (TPD) based on their Disability Rating from the Veterans Administration. The disability rating from the VA has to be 100% service connected if the VA certification is used. The Application process is straight forward and the VA can issue a document indicating the VA Disability rating upon request.
What some military Veterans do not know is that loan forgiveness of their Federal Student Loans can still be obtained even if their VA disability rating is less than 100%. It is a slightly different process.
Here is how it works. Any Medical Doctor can certify that a Veteran is unable to work based on their medical condition and that the medical condition will prevail for the next 5 years or can be expected to result in death, and it will prevent them from obtaining substantial gainful employment. For an example, any Veteran who suffers from Post Traumatic Stress Disorder which has cause a VA Disability rating of 80%, can still obtain a Total and Permanent Disability Discharge of their Federal Student Loans. (TPD)
The Department of Veteran’s Affairs and the U.S. Department of Education are now working together to enable our Veterans more access to TPD process by cross referencing the data bases, much like they have done with the Social Security Disability system.
Attorney D.J. Rausa is a Veteran who served in the United States Navy. He has assisted dozens of military Veterans obtain their TPD. Sometimes the application is denied with no explanation and the Veteran is in need of the assistance of a Student Loan Lawyer. The Veteran has the right to have someone act on their behalf.
Military Loan Forgiveness Application Forms
Veterans with a service-connected disability may apply for student loan forgiveness at the link below. Forms are available in English and Spanish.
An application has to be filled out and sent to the U.S. Department of Education, TPD Servicing, and Nelnet.
There is also a Third-Party Designation Form to be completed.
You may also apply by phone or ask questions by calling 888-303-7818.
Tax Consequences Under New Tax Law
As a result of a change in tax law, loan balances that are discharged due to TPD are not considered income for federal tax purposes if you receive the discharge during the period from January 1, 2018 through December 31, 2025.
If you are a Veteran or know of a Veteran who needs to exercise their right to take advantage of this benefit, then please share this information with them.
We here at Marshall & Associates are always available to assist our Veteran Community.
I was involved in an automobile accident. What are my options?
It is important to know Tennessee auto accident laws when involved in a collision. Tennessee is considered a fault state for car insurance purposes. Most states in the United States fall into this category. A fault state basically means that the driver at-fault is responsible for funding the damage resulting from the accident including medical bills, vehicle, and other property damage that may have occurred. A fault system focuses on determining who caused the collision. In a fault state, like Tennessee, people injured in car accidents usually have several insurance filing options.
Insurance Filing Options After Auto Accident
Following an auto accident, there are several ways to proceed with a claim for damages and/or injuries. Which course of action to take depends on your individual circumstances such as who was at fault, whether you have active insurance, and whether you wish to file a claim at all.
Ways to File a Claim
File a claim with your own insurance carrier. Your insurance company will then typically turn around and seek reimbursement from the at-fault driver’s insurance company, if applicable.
File a claim directly with the at-fault driver’s car insurance company, and/or
File a personal injury lawsuit in civil court, seeking compensation from the at-fault driver.
An injured Tennessee driver, passenger, or pedestrian might decide to try all of these options, or only certain ones, depending on the specifics of the case.
Auto Accident Checklist
When you are involved in an accident, it is difficult to remember all the steps to take to ensure you have a proper record and documentation for insurance and claim purposes. You may want to print this list and place it into your glove compartment. Remember the statute of limitations in Tennessee for taking legal action or having legal action taken against you is 365 days from the date of the accident. Some exceptions apply.
Seek medical attention if you or anyone involved is hurt. Calling 911 is the best way to reach help at the scene of an accident.
Write down the name and address of any witnesses at the scene of the accident. Note: Police officers and other first responders do not always record this information.
Notify the police and complete a report. Make sure the police officer provides you with a report number. It usually requires five business days for the reports to be filed and available for review. Make note of the officer’s uniform color to help you identify the station. Knowing the uniform color can help you determine which law enforcement agency arrived at the scene. Was it the Metro Nashville Police Department, the county sheriff or Tennessee State Troopers?
Write a letter to the police department to request the report. Make a copy of the letter.
Observe the scene of the accident and look for physical evidence of the accident such as tire marks, gouges in the pavement and take note any road signs. Take pictures to prove your observations.
Contact your Primary Care Physician and make an appointment if you have suffered injuries and continue to get medical care per the advice of your doctor.
Call the Marshall & Associates law office at (615) 885-4335 to ask questions or seek help on an accident case. We can help provide you with options and direction with regard to your case.
We all know the old adage, practice makes perfect. Well, it is time to practice driving your car without touching your phone. Put it away, out of reach the second you place your vehicle in drive. The law, often referred to as Hands Free Tennessee, was put into place to reduce the number of deaths on the state’s roads and interstates resulting from distracted drivers.
Tennessee Penalty for Using Your Phone While Driving
As of July 1, 2019 phone use will be a Class C misdemeanor, a moving violation, and you will be subject to a fine and court costs. Tennessee law enforcement officers will be out enforcing this law.
Driver Phone Use
Our attorneys have read the entire contents of the law and it is not a simple prohibition of cell phone use while driving. The law is clear that you cannot hold it in your hand or support it with any part of your body while driving. This goes beyond just talking, texting, Googling, getting directions, or reading Facebook. The days of live video broadcasting from inside a moving vehicle are gone. No selfies, playing Candy Crush, taking pictures, or recording the scenery while rolling down the road are allowed any longer. This of course applies to all drivers whether they are residents, tourists, and those just passing through our state.
There are exceptions to this prohibition. They are very specific. If you mount the phone on the dashboard or other place inside the vehicle then it can be used, however, it cannot block your line of sight. GPS, Google Maps, Waze, and other directional apps are allowed.
Hands Free in Tennessee
If you go totally hands free, then you can talk on the phone. Talking on your Apple Watch is permitted as well. Activating or deactivating an Apple Watch with a single tap or finger swipe is also allowed, but you still must remain hands free.
Cell Phone Usage for Under 18
If you are under 18, you cannot use the phone for any purpose while driving. Parents need to be aware of this because they certainly do not want to cause their young driver children to get a ticket.
Penalties and Fines
First Time getting busted is going to cost you a moving violation and a fine of $50.00 plus court costs. You can get out of paying this if you elect to complete a driver education class.
If you are on the phone and you are involved in an accident, it will cost you at least $100.00 plus court costs. Same goes for your third ticket.
If you get busted in a school zone, construction zone, or where there are transportation workers present, you can expect a $200.00 fine. Ordering your Starbucks Coffee can wait.
If you have a bonafide emergency, then the use of the phone is allowed. An emergency is defined as an occurrence that threatens human life, health or property. Being stuck in traffic and calling your boss would not be such an emergency.
If you find yourself driving down the road and you have to use the phone, then pull over and lawfully park. Stopping in the breakdown lane on the highway is NOT lawfully parking. Neither is parking in a bike lane. To lawfully park, you need to be off the roadway.
Article by Attorney DJ Rausa, Marshall & Associates
A trusted student loan adviser, within the school, was indicted for stealing student loans from those attending school and for taking out student loans fraudulently by using the identity of the unsuspected. I am can imagine the surprise, worry and devastation that this would cause a student.
Importance of Students Researching Financial Aid Balances
I have been practicing Student Loan Law since 2014, but this is a new one on me. The Student Loan System has its problems, but now, it is even more important for a student to check their financial aid and balance that account against their tuition costs every semester, much like a check book.
This is a very good habit to get into because it will keep a student loan borrower up to date on the cost of each semester. It will also provide a good understanding of the cost of the degree being pursued. It will ensure that the student loan money being borrowed is being used in furtherance of that education and enable a student to get a clear picture of what type of salary is going to be needed to address the total debt burden after graduating.
How to Request Student Loan Report
I am often asked by my clients, “How do I get this report? ”
You can obtain your student loan report from the US Department of Education by utilizing this link.
This report will provide detailed information regarding all your Federal Student Loans. It will give the student loan borrower the loan amount, the balance of all Federal Loans, the interest rates, the payment status, the information of the servicer, and the type of loan that was made.
This information is critical to review not only when a student loan borrower is in school, but also after graduation when payment on the loans are due. While formulating a plan to manage student loan debt, checks and balances need to be made to eliminate surprises.
At Marshall & Associates, our Student Loan Attorneys will review this report with you to ensure it is accurate.