President Joe Biden’s reform of the public service loan forgiveness program is beginning to yield results 14 years after it was signed into law by former President George Bush.
The public service loan forgiveness allows nonprofit and government employees to have their federal student loans canceled after 10 years or 120 payments. The program has been plagued by problems, however, making people who get the relief a rarity.
Karen Tongson’s student loan debt was erased and she received a $20,000 refund. It was a surprise to her as she had been repaying 16 years’ worth of debt totaling $90,000 without any loan forgiveness.
As a professor at the University of Southern California, living in Los Angeles Tongson qualified for the public service loan forgiveness program but had heard many stories about people not getting it.
“No one had any faith. When I told friends and other colleagues that I’d signed up for this thing, they were like, ‘That’s never gonna happen, “Tongson told CNBC
Just around 8,300 people have had their loans forgiven under the program as of June 2021, according to higher education expert Mark Kantrowitz. More than 400,000 have applied.
Borrowers in public service jobs who thought they were paying for the cancellation of their loan are usually surprised to find that they were not qualified most times for technical and confusing reasons.
“I noticed that a lot of payments I made weren’t counted. And I never understood why,” Tongson said.
To get educated, Tongson felt she had no choice but to borrow. “I don’t come from a very well-resourced family,” she said.
Tongson moved to the U.S. from the Philippines with her mother Maria Katindig Dykes and her step-father, Jimmie Dykes when she was 10.
She had to borrow money to fund her education. She borrowed a $70,000 student loan. “It allowed me to keep up with my peers educationally,” she said.
After a few years at a community college, Tongson was accepted into the University of California, Los Angeles, where she studied English and eventually graduated Summa Cum Laude. She then went on to get her Ph.D. at Berkeley.
Throughout those years, Tongson worked multiple jobs, including at a local video store. She also was awarded fellowships, but they were at most $12,000 a year.
“Imagine trying to pay for rent in the Bay Area with that much money,” she said. “I had been living so hand to mouth.
“There was a time in grad school where I just lived off the same frozen bag of Costco chicken,” Tongson added. “I ate it every day, for what felt like a month.”
Today, she is a professor at the University of Southern California, where she teaches courses on British and American literature, race, and Los Angeles food cultures. She is the department chair of gender and sexuality studies at USC and has published multiple books.
Despite being employed, she said she still lived paycheck-to-paycheck, because of her student loan payments, which have ranged from hundreds of dollars a month to thousands.
“It felt disconcerting to be struggling so much,” Tongson said. But that was about to change.
Last month, Tongson found that her student loan balance had dropped to $0.
In addition, the U.S. Department of Education refunded her for years of overpayment, which meant she suddenly had around $20,000 in her bank account. “It was pure, pure relief,” she said.
Tongson’s surprise came as a result of reforms the Biden administration has been making to the public service loan forgiveness program. It has reassessed borrowers’ applications and recounted their payments, and it estimates that more than 500,000 people may be closer to forgiveness as a result. Many others are likely due refunds, as well.
Tongson transferred the $20,000 to her savings account. “This is the first time I have savings,” she said.