I Was Just Shut Out of Student Loan Forgiveness. And I’m So Tired.

During my sophomore year at the University of Pittsburgh, my mom’s multiple sclerosis took a bad turn. My parents could no longer afford my tuition. Luckily, I suppose, getting $42,207 from a mix of governmental and private sources at the student aid office was easier than getting into one of the good dorms.

In the 13 years when I paid student loans more or less regularly, I held a few jobs at dying newspapers and then went freelance. These were years of thrift store clothes, staycations, and ignoring the “check engine” light. I still coughed up $250 to $300 a month for student loans because that’s what financially responsible people did.

In total, I have paid $57,347, according to my account on American Education Services (AES), the quasi-governmental state agency that manages student loans doled out in Pennsylvania. That is 136 percent of what I borrowed. I whittled the principal down to about $22,000. At this rate, I would be rid of the loans in my late 40s and have paid about 250 percent of what I originally borrowed.

I have not made a payment in three years. After a particularly rough year, I filed an application for income-based repayment, attaching an embarrassing 1040. The monthly payment for my federal loans was reduced to $0. As for my private loans, I fell behind and defaulted, a much-feared legal status in which a creditor has declared they have given up on your broke ass and can jettison your account to a collection agency and negatively report it on your credit history. 

Within that time, senators Bernie Sanders and Elizabeth Warren slipped the idea of student loan forgiveness into presidential debates, cheered on by young activists. Cancellation went from a fringe progressive fantasy to orthodoxy within the Democratic Party. Since the campaign, President Joe Biden has promised, at a minimum, $10,000 in forgiveness of debts owned by the federal government. 

It was tantalizingly close to the remainder of my federal loans—or, at least, the loans they called "federal" every time I called AES. Of my remaining $22,000 debt, the federal loans are $10,459. On August 24, Biden announced he would cancel student debt. I could feel a dark energy leaving my body, at a cellular level.

Then, last week, I became one of millions of borrowers suddenly shut out of loan forgiveness. My loan is part of a defunct federal program unexpectedly deemed ineligible. We are a particularly withered and long-frustrated segment of student loan carriers, who the banks have quietly been sucking dry for over a decade.

The people now excluded mostly have loans through the Federal Family Education Loan Program (FFEL). Starting in 1965, the Department of Education paid subsidies to banks, which used them to partially cover loans to higher-ed students. This program made loans to 60 million people. The feds guaranteed these loans, paying the bank 97 percent if someone defaulted. 

Some called it corporate welfare, as the bank assumed almost no risk. This is one reason President Barack Obama sacked the program in 2010. Since then, the Department of Education directly oversees federally funded student loans, saving taxpayers an estimated $62 billion over 10 years, according to the Congressional Budget Office, by axing the banks as useless middlemen.

FFELs were a snag for Biden’s plan: With executive action, he could direct the Department of Education to forgive its own loans, but those subsidized by the feds but owned by private banks were more complicated. The official word was that borrowers would need to apply to consolidate them to become fully federally owned, and we would have until the end of 2023 to do that. Then those loans would get the $10,000 shave, like any other federal loan.

As the particulars were being hashed out, FFELs became a point of contention in a lawsuit filed by six Republican-led states. Some complained that forgiving FFELs would decrease revenue to their own quasi-governmental student loan servicing agencies.

So the Department of Education quickly and quietly changed the program last Thursday. FFELs were still eligible for forgiveness if you had already submitted a consolidation application before that day, but not after. An administration source told the Washington Post that the abrupt change will impact 770,000 borrowers, but 4 million people have these types of loans.

I had not filed an application to consolidate. To be honest, I had not been paying attention to the details of the student loan forgiveness plan, which does not even have an application form yet. I never thought my loans would be excluded. I forgot they were in any special class.

Even when speaking to credit counselors and my loan servicer, the distinction between FFELs and any other “federal” loans was never mentioned. There has always been a dichotomy. My “federal” loans were soft and squishy, open to hardship forbearances and income-based repayment plans. My “private” loans were stiff, serious, and owned by a bunch of hard-asses at a bank.

So when I called AES on Friday and a woman told me my “federal” loans were owned by PNC Bank and therefore not eligible for forgiveness, I stuttered out, “Are you sure you are looking at the right loans?”

“Federal,” in this case was shorthand for subsidized by the federal government, which also set their more amiable conditions. It was easy to forget the bank in the background siphoning off the interest.

Yes, I should have been more informed. Then again, the deadline suddenly went from December of 2023 to yesterday.

“So,” I asked over the phone, “48 hours ago, I would have been able to file a consolidation application and the loans could be forgiven but not today? And there was no advance notice?”

I already knew this was the case, but I wondered what she would say when presented with the Kafkaesque-ness of what had happened.

She confirmed this was correct. The FFEL program ended in 2010. So the people now ineligible for forgiveness have all been carrying it around for more than a decade, unable to fully pay it off as years go by. 

As some have pointed out, FFEL loan holders are disproportionately people who attended community colleges, historically Black colleges and universities, and for-profit schools. I can’t be the only one who has already paid more than 100 percent of what I borrowed and is still facing years of monthly payments.

As a kicker: If we had just walked away from these loans years ago, they could be forgiven now. Borrowers with FFEL loans in default still qualify for forgiveness. Their loans were absorbed by the Department of Education. Only those of us who kept our FFELs on life support are excluded.

With every turn, the rewards and punishments of the system seem more arbitrary, but to point out unfairness in the student loan societal clusterfuck would be cliché and obvious.

As for my private loans, default has not been so bad. Arguably it’s been better than paying a monthly sacrifice for them. My account seems to bounce from collection agency to collection agency, none of which seem all that interested in me.

Every six months, I get a letter. Its purpose is to make me aware that this agency intends to collect on the debt and asks if I contend it. I respond with a variation of the same form letter, asking for more information. At first, this was a stalling tactic. Now, I legit want whatever LLC just demanded $12,000 from me to clarify who they are and their relationship to the last one.

They mail me a copy of my original promissory note, signed in 2003 when I was 20 years old. Then nothing happens. No one calls. No one has reported it on my credit. No one sues. That all could happen. Failure to pay on student loans has trapped many people in financial hell. Just not me yet, for reasons I don’t understand.

I’m not entirely being a snit. I am working with a credit counselor and am open to a payment I can afford. They just engage me so little, I don’t know where to start. But I do get moral satisfaction out of not paying and not contributing to an exploitative system. I have already paid 136 percent of what I borrowed. Isn’t that a decent enough return on the initial investment?

When student loan forgiveness became real White House policy, it seemed like The Establishment was finally acknowledging that we had paid enough. Now, some of us who have paid the most are getting thrown under the bus.

Perhaps it’s a temporary sacrifice for the greater good. Excluding FFELs may be a quick swerve to avoid a legal loss that threatens the whole program. The administration may correct it later. As for now, I guess I am out $10,000. I don’t know what I am going to do, which is a very old feeling.

Nick Keppler is a Pittsburgh-based freelance journalist who often writes about health, science, and public policy. His work has appeared in Men's Health, The Financial Times, Slate, The Daily Beast, VICE, and the Washington Post.