By Lynn Sygiel, editor, Charitable Advisors

The topic comes up frequently. Just about every election cycle, candidates talk about the spiraling cost of higher education.

According to 2017-18 figures provided by the nonprofit organization College Board, the average total cost to attend a four-year state college or university is $25,290. The price tag for a private institution is a staggering $50,900.

So what’s a student to do? For many, the answer is borrow and worry about the consequences later.

According to the Federal Reserve, outstanding student loan debt across the United States has grown to $1.5 trillion. That affects about 1 in 4 adults under the age of 30. Those with a bachelor’s degree owe a median of $25,000, according to the Pew Research Center.

Matt Heston is part of this group. He graduated from IU’s School of Public and Environment Affairs (SPEA) in 2015 with a master’s in public affairs (MPA) and a concentration in nonprofit management. He landed a job at the University of Cincinnati Foundation, a nonprofit, but was saddled with student debt from both undergraduate and graduate school.

Heston wasn’t necessarily looking for a lifeline, but it was during grad school that he heard of an innovative, but not-so-well-known federal program that might offer some relief, at least for nonprofit workers such as Heston.

The helping hand was the Public Service Loan Forgiveness (PSLF) program, which originated in 2007 when Congress passed the College Cost Reduction and Access Act. The program is for nonprofit and government employees. The idea is seemingly simple: Work for 10 years in one of those two sectors, make 120 payments based on your income, and then have the rest of your loans forgiven.

In theory, the concept seems sound. In practice, not so much, as Heston and others have found. The PSLF program has a host of confusing and somewhat complicated requirements that are difficult to navigate.

“When I took this job, I recognized that I was working for a nonprofit, and the loan payments that I were making could qualify towards PSLF, but I had not yet signed up for it,” said Heston. After two and a half years of work, and at the urging of his colleagues who were on that track, he applied for the program.

That’s where simplicity ended for Heston.

He found out that working full time for a nonprofit wasn’t the only condition he had to meet. His loan had to be the “right” kind of loan (a direct loan from the government), and he had to be making the “right” kind of payment (a monthly amount based on a percentage of your income).

After graduation and prior to submitting an employer certification form, he had made regular loan payments. But his hopes were dashed when he was rejected because those two-and-a-half year payments were not income-based. Additionally in 2016, he married. His wife, an optometrist, also had student loans. In order to qualify for PSLF, though, not only did he have to change his type of repayments, but his income would be combined with hers, escalating his payments because they would be based on the entire household income.

“To qualify for PSLF, I had to jack up my payments by like another $600 a month. It was just not possible for us to utilize that service. We determined that it’s probably best to slog it through all the way to the end. In the long haul, my savings would have been $3,000 or $4,000,” Heston said.

Laura Mazur also got her degree from SPEA the same year and heard about PSLF from her professors. She had $45,000 in student loans.

While she had been making regular payments that she believed could be applied toward forgiveness, it was at the urging of her brother-in-law that she checked to see if she actually qualified. When a borrower submits an employer certification form, not only do they learn if the job qualifies, but if the loan type and repayment plan is correct.

“I’ve always worked in government, and I know the government qualifies, but what I didn’t realize is that only certain repayment plans qualify. So that’s where I ended up losing a bunch of time. I had made over two years or 23 payments and didn’t end up qualifying because I was on the wrong payment plan,” said Mazur who now lives in Denver. “That was very upsetting.”

Something, too, that she didn’t realize is that you don’t actually apply for forgiveness until you are ready, in other words, all 120 payments are made. In February, she started anew and will now reach her 120 payments in 2028. At that time, according to Mazur, a very small amount will be forgiven.

Of the seven young professionals interviewed for this story, all but one never talked with a loan company staff member that was collecting the payments, but rather did all the research and communication online. The Department of Education contracted several companies, including FedLoan Servicing, but in 2012, assigned all PSLF accounts to FedLoan.

For Mazur, a co-worker who had submitted an employer certification form, helped guide her the second time around, showing her where to find the repayment information. Her monthly payment would increase by $100, and while she mulled participation, she asked her employer to submit the form. Personally, she thinks submitting the form should be a requirement.

“While it’s a lot of paperwork to fill out annually, people will be a lot less annoyed than if they make it through 120 payments and at the end of it, find out that none of those payments qualify,” she suggested.

Another SPEA graduate, Noor Shaikh, also lives in Denver. She has made 24 payments toward her $80,000 debt. If she continues at her current repayment level, she will be forgiven half of it.

“It’s kind of scary especially now that you keep hearing about problems and a little terrifying knowing that I relied on an electronic form to decide the next 10 years of my life,” she said. She would tell all students with loans to talk with their college’s or university’s financial aid office. “They have to have training about this stuff, but I just don’t remember seeking them out when I was in school.”

Extended payment plans. Wrong kind of payments. Employer certification. The requirements are on the Department of Education Federal Student Aid website, but the bottom line appears to be not just “buyer beware,” but “buyer, make sure you do your homework.”

With that in mind, meet Michael Lux, a 2012 graduate of George Washington University Law School, and the self-dubbed Student Loan Sherpa. Since 2013 Lux has blogged and answers questions recent graduates, colleges and others pose about student loan problems. He focuses his efforts on student loan strategy and advocacy.

Lux said when he graduated, his future seemed bleak. He had six straight years of student loans and limited job prospects, which prompted his move to Indiana. His first job was for the Indiana attorney general’s office, and then he worked for the Marion County prosecutor’s office. Both jobs qualified him for PSLF.

Along the way, however, he spent time researching the code of federal regulations to find the answers to student loan questions and saw value in sharing what he was learning.

“At a certain point, it just struck me, ‘This should be information that people easily have access to. You shouldn’t need a law degree to pay off your student loans.’

“It’s a stressful subject for people, and it can be confusing. I try to help people navigate these issues themselves. I’m a firm believer that you don’t need to hire a student loan expert to analyze your particular student loan situation,” said Lux.

From his time at the prosecutor’s office, he has 40 of the 120 payments necessary for PSLF. If he goes back to government work, he’ll pick up where he left off. There is no gap limit. He currently makes a monthly payment, which does not count toward forgiveness.

He agrees with Mazur’s brother-in-law that the best way to track progress is to submit an employer certification form.

“I suggest people do that on a yearly basis and whenever they change employers, so that those records stay up to date. And what that does is say, ‘I’m working for an eligible employer,’ but it also triggers a review of your student loans. It will make sure that your loans are eligible and create a paper trail.

“After one year, you’ve got a record that says, ‘I’ve made 12 payments toward eligibility.’ And the next year you do it, you’ve got your 24. Year after that, and the really important reason is to do it, is if you’re on the wrong repayment plan, or your loans aren’t eligible, those are the things that can be fixed. But the sooner you identify the issue, the sooner you can fix that and start the tally toward 120. That’s why it’s really important.”

While there are other forgiveness programs, he reminds those considering the PSLF of the three main qualifiers: eligible employer, eligible loans and eligible repayment plans.

He believes that in the past few years, the Department of Education has gotten much better at providing information to empower individuals to make the right choices and having a coherent strategy from day one will save you a lot of money.

None of the interviewees for this article personally knew anyone who has hit the 120 mark. That may be because according to the Department of Education, borrowers who met requirements would first see remaining outstanding balances forgiven beginning last October. Despite an estimated 42 million federal student loan borrowers, only 139 have fulfilled the eligibility criteria needed to have their loans forgiven at any time over the next two years.

As of that third quarter of 2017, the latest available data, there are 739,719 borrowers who have submitted one or more approved PSLF employer certification forms. However, fewer than 1,000, according to the Department of Education, will be eligible in 2018 because in the early years of the program there was limited availability of income-based repayment plans.

Five states have filed lawsuits against Navient for not properly informing borrowers. The most recent, California, was filed in June.

Lux said that borrowers are assigned a company from the government, but one of his suggestions to improve the servicing is to have borrowers select their service.

“It would create a real incentive for these servicers to actually provide a quality service. Right now their only incentive is to meet the minimum terms as required by the contract with the government and that’s it,” he said.

Michael Lux suggests several resources: https://studentloansherpa.com/favorite-student-loan-sites/