For so many student loan borrowers, paying off the hefty loans means slogging through years of disciplined payments made to a loan servicer who watches over the loan balance. But for a select group of professionals, those payments are swapped for something equally arduous to provide: 10 years of public service.
Signed into law in 2007, the Public Service Loan Forgiveness (PSLF) program is a lifeline out of debt that allows recent grads to give back to their communities while also earning total forgiveness for their loans.
For Chicagoans Ann Wysock and Mike Leavitt, the PSLF program was a means to an end. Their combined student loan debt of some $400,000 would have been daunting in any profession.
Wysock and Leavitt, who earned doctorates in physiotherapy, contemplated how long it would take them to pay off loans as they both entered their chosen field. They said a counselor recommended PSLF to them at their school, and the young married couple opted in.
Now, the couple feels PSLF is a program that looks great on paper, but in reality, it was a nightmare for them. Their blame lies with FedLoan Servicing, the loan servicer chosen by the US Department of Education to oversee the program.
"The mental anguish caused by this whole thing was pretty significant," Wysock told NBC 5 Responds. "When we came to find that everything they had told us from the start was not true, the emotional upheaval was horrible."
Her husband had even sharper words.
"The rules are all over the place, and they make it purposely difficult to follow," Leavitt said. "People have told the federal government by the thousands to look into this contractor, and they haven’t done anything."
FedLoan Servicing also does business by its formal name, the Pennsylvania Higher Education Assistance Agency (PHEAA). PHEAA was contracted by DOE to service the PSLF program starting in 2009 for $5 million every five years of service, according to its signed federal contract obtained by NBC 5 Responds.
Wysock and Leavitt spoke from experience, each battling FedLoan for months, they said, to wrest proof from the servicer that they’d completed their end of the bargain.
Wysock and Leavitt each said they routinely submitted the required documentation, in exacting form, for the better part of a decade.
"For more than 10 years, we’ve submitted with exceptional detail our tax forms, our employment certification forms they review over and over and over," Leavitt said. "And none of that mattered when it came time to get our letters of confirmation."
The delays cost Wysock and Leavitt more than just frustration.
Each said they worked longer in their public service jobs than what was required but feared resigning in case FedLoan decided to deny the request to forgive their combined $400,000 in loans.
And time was of the essence. Wysock and Leavitt each found exciting new jobs in their field of work in Scotland, where they’d decided to move their young family.
As the clock ticked toward departure for their new adventure, the couple said they were crestfallen they could not go together, due to Wysock's unfinished business battling FedLoan.
"When we came to find that everything they had told us from the start was not true, the emotional upheaval was horrible," Wysock said.
Judging by the online comments of other PSLF participants submitted to the Consumer Financial Protection Board, among other agencies, NBC 5 Responds found FedLoan may not be doing so well by the do-gooders enrolled.
The complaints are so prevalent that the state of Massachusetts went after the servicer, accusing it of "failures" that "harmed borrowers," causing some to lose grants and others to incur additional fees.
FedLoan admitted no wrongdoing and settled the Massachusetts suit.
In a statement to NBC 5, a FedLoan spokesperson added that the "vast majority of the allegations in the lawsuit were unsubstantiated. Any representation otherwise, including a larger number of borrowers affected, the types of loans that are impacted, or the relief available, is inconsistent with the agreement itself."
To read FedLoan Servicing’s complete statement to NBC 5 Responds, click here.
Back in Chicago, bruised from their battle with FedLoan, Wysock and Leavitt asked NBC 5 Responds to look into how FedLoans treated them, as well as other public service professionals.
Leavitt said his loans were eventually forgiven, and he received a confirmation letter after "countless" hours on the phone with the servicer over several months.
But Wysock’s case remained open, with no apparent end in sight.
NBC 5 Responds asked FedLoan Servicing about Wysock’s case, but the government contractor would not answer questions, citing privacy restrictions.
But within a day and a half, Wysock received the green light she had been waiting for: her loan forgiveness official.
The intervention brought both financial relief and the freedom to fly to their new life together for this family. Their gratitude is still punctuated with worry for others counting on the PSLF program.
"The accountability just doesn’t exist for these servicers, and they’re managing billions of dollars," Leavitt said. "It’s unconscionable an organization responsible for managing so much money in a time of global pandemic when many health care practitioners like us working on the front lines are putting our lives at risk."
In July, FedLoan Servicing stunned the loan community when it announced it does not plan to continue its work for the Department of Education. The contractor has been behind the Public Service Loan Forgiveness program since 2009. Now, its current contract expires after Dec. 14, 2021.
"What made good business sense in 2009 relative to supporting our public service mission, no longer makes sense today," a statement from the contractor reads in part, adding that it will "continue to fulfill its responsibilities… for the remainder of its contract, and beyond as necessary, to ensure that borrowers experience a smooth and manageable transition."
When FedLoan made the contract announcement, Rich Cordray, chief operating officer for Federal Student Aid (FSA) with the Department of Education, sought to reassure PSLF and TEACH grant borrowers of a smooth transition.
"While PHEAA’s current contract expires in December 2021, they agreed to continue working with FSA until all borrowers have been successfully transferred to a different loan servicer," Cordray’s statement reads.
The Consumer Financial Protection Bureau said borrowers can expect notices from the Department of Education notifying of a new loan servicer. (To learn more about the process moving forward, click here.)
In the meantime, millions of borrowers have been thrown into more uncertainty about the path forward.