At the end of 2021, Taryn Francis and her husband owed around $45,400 between student loans, an auto loan, a thrift savings plan (TSP) loan and credit card debt.
But in 2022, they got a major boost: Francis had $19,000 in student debt erased through Public Service Loan Forgiveness (PSLF), despite being previously rejected.
The program allows borrowers who work for government or nonprofit organizations to have their federal student loan balances cleared after 120 qualifying monthly payments. It has a history of delaying or outright rejecting relief for most applicants, but recent improvements to the program, including expanded eligibility, have helped a growing number of borrowers see their years of service finally pay off.
"When I initially tried and got the [rejection] that discouraged me, I didn't lose hope," Francis tells CNBC Make It of getting turned down for PSLF in 2019. "I lost hope that it would happen for me that way, but I did not lose hope that I was going to have this debt paid off."
Although Francis was managing her monthly payments responsibly and without too much strain on her family's budget, the feeling of carrying the debt was still a burden. Not being able to use that money for other goals weighed on her.
"Of course, the return was me having a college degree, and me being able to have the position that I'm in now," she says. "But when you're giving money to someone else and interest is accruing, that doesn't feel good."
With that burden now $19,000 lighter, Francis and her husband look forward to the day it's gone completely.
"We want to know and experience what it's like to not owe anyone," she says. "We have a desire to be free from the burden that most debt brings. We want to show and encourage our children that there is a different way of living."
The costs of debt forgiveness
Nearly 44 million Americans hold federal student loans, according to Education Data Initiative. But currently, routes to student debt forgiveness are limited.
There is relief available to borrowers who were defrauded by their schools and students with disabilities. To earn PSLF, borrowers have to make monthly payments — and continue working for an eligible employer — for 10 years.
While you can change roles and level up within your organization like Francis did, or move to another qualifying organization, 10 years can be a long time to stay at a job or even in a certain field. For Francis, who's currently an IT project manager, that sometimes meant pushing through moments of doubt by focusing on her debt-free priorities.
"Even throughout the frustration or the changes that come with having a job — especially within my particular sector, there's so many changes — I was understanding that it's still serving a purpose," Francis says.
As of 2019, she had worked for the federal government for 14 years and made regular student loan payments. But her initial forgiveness request was denied because of the type of payments she was making. Borrowers must be on an income-driven repayment plan for payments to count toward the required 120, and Francis had been on the extended repayment plan, which keeps monthly payments low and fixed for up to 25 years.
Francis wasn't the only applicant denied forgiveness. The program was notoriously cumbersome prior to an overhaul in 2021, which loosened some requirements, like allowing late or installment payments to count toward forgiveness as well as certain deferment or forbearance periods.
Additionally, President Joe Biden introduced a temporary waiver in October 2021 that made previously ineligible payments qualify toward PSLF. The waiver ended in October 2022.
The eligibility expansion gave Francis a renewed sense of hope. She resubmitted her documents in the beginning of 2022. "In like one week, everything was canceled," she says.
The 'light at the end of the tunnel'
Being debt-free was always the plan, Francis says, and student loan forgiveness helped accelerate that journey. She and her husband are currently down to $13,650 between their credit card debt, auto loan and TSP loans.
"I can see the light at the end of the tunnel, especially since we had the $19,000 [student debt balance] removed," she says. "If we had that too, it would take a little bit longer, but we are really hitting the ground running because it feels so possible now."
Francis and her husband are using a modified debt snowball method "tailored to our financial situation" to pay off their credit cards, auto loan and mortgage, the latter of which she aims to have paid off by mid-2029.
"Instead of waiting to pay off our debt before we invest, we are still investing," Francis says. She also tracks the family's finances with an Excel sheet and budgets up to a year in advance.
The journey hasn't always been easy, but the couple have become more disciplined and made a lot of progress toward their goal, Francis says. She expects that they'll only have mortgage debt left by the end of this year.
As for student debt, Francis aims to do everything she can to avoid watching her kids take on loans to go to college in the future. They're currently just 7 and 5 years old, so she has time to prepare.
"I believe that [student debt] is a tool, it is a resource that's available. I had to get a loan, otherwise I would not have been going to college," she says. "But now that we know better, we want to do better with our children and just go ahead putting in the work now to prepare them so they won't have to go down that route."
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