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'The long nightmare was over': This 36-year-old just had $167,000 in student loan debt forgiven

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Christopher and Baochau Ton Handley on the University of Notre Dame campus.
Courtesy of Christopher Handley

Did you qualify for loan forgiveness under the Department of Education's temporary waiver? Email senior money reporter Alicia Adamczyk for a chance to be featured in an upcoming story.

Most mornings, Christopher Handley diligently logged into his FedLoans account to check how much remained of his $167,000 student loan balance from college and law school. He had recently made the 120 necessary on-time payments and submitted his forgiveness application, and had been eagerly anticipating his balance reset.

But one day in early November, the 36-year-old assistant district attorney skipped his routine. He was feeling dispirited with the Public Service Loan Forgiveness (PSLF) process and couldn't bear to see the six-figure account number staring back at him yet again when he was certain he should have already been granted forgiveness.

Handley's initial application had been rejected without an explanation, though he met all of the requirements: On top of the 10 years of monthly payments, he consolidated his loans into an income-driven repayment plan the month after he graduated from law school, and has worked at the same qualifying job for his entire career.

Frustrated, he resubmitted it and had been waiting for weeks with no official update. A bottle of champagne he and his wife planned to drink to celebrate remained unopened.

When the Texas resident arrived at work at the Harris County District Attorney's office on that day in November, though, he checked the PSLF subreddit, which had become a support group of sorts for him over the past few years. His heart starting beating faster as he read the latest posts: Multiple users reported that their loans had finally been forgiven. Could it be his lucky day as well?

"Lo and behold, the long nightmare was over," Handley tells CNBC Make It. He logged into his account and, with "excited disbelief," saw a $0 balance remaining, saving him over $1,000 each month in loan payments.

That weekend, he and his wife finally popped the champagne.

Changes to PSLF program benefit borrowers

Aside from Handley, tens of thousands of other public servants have had their debt wiped away in the past few weeks as the Department of Education under President Joe Biden has made a concerted effort to improve the federal loan forgiveness program.

PSLF promises to eliminate the remaining balance of public servants' federal student loan debt after they make 120 qualifying payments working for a U.S. federal, state, local or tribal government, or not-for-profit organization. It's a noble goal, but one that has been stymied by bureaucratic mismanagement and miscommunication over the past few years, causing frustration for hundreds of thousands of workers across the country.

To remedy that, the Education Department made a few temporary changes to the program in October, including offering a waiver to retroactively count FFEL, or Federal Family Education Loans, toward the 120 payments needed for forgiveness; counting any prior payment made as qualifying toward the 120 needed as long as the borrower has a direct loan; and automatically certifying employment for federal employees and military members.

The intent is to help public servants who may have been tripped up by or did not know about the program's more technical rules.

In the weeks since, tens of thousands of public servants have logged into their loan accounts to find $0 balances. Since the FFEL waiver alone was announced in October, about 30,000 borrowers have received about $2 billion in relief, according to an Education Department spokesperson. They did not specify how many other borrowers had received forgiveness during the same time period.

Don't give up on forgiveness

Even with the changes, actually getting a loan balance forgiven by the Education Department can still be complicated and time-consuming for borrowers. Handley didn't need the waiver to be eligible for forgiveness, but his process also came with the headaches the program is known for.

Over the years, Handley worried that the program would be shut down or changed because of political pressure. And then there was the month-and-a-half long wait between submitting his forgiveness application, getting denied and finally logging in to find his $0 balance. Calls to FedLoans often left him more confused about the status of his application than he had been before he made them.

"The frustration is, at work, I'm used to walking into a court and getting things done," Handley says. With the loan forgiveness process, "it's a black box where you're just sending out forms to government clerks" and hoping for the best.

Eventually, Handley got everything ironed out. If there's one thing he wants to get across to borrowers, it's to not give up on forgiveness, even if it takes weeks or months to work out. Persistence, quite literally, pays off.

"The biggest detriment is telling people don't bother. It's definitely worth doing," he says. "Do your paperwork, apply and get that money."

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