3 reasons a nonprofit worker decided to skip Public Service Loan Forgiveness and pay off $115,000 in student loans on her own
Micah H. decided to skip the long process of applying for PSLF and pay off $115,000 of student loans on her own instead.
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Micah H.
- 33-year-old Micah H. majored in social work for both undergrad and grad school.
- She knew she would have a career in the nonprofit sector, where she could get her six-figure student loan debt forgiven through PSLF.
- But Micah decided to pay off her loans on her own anyway for three reasons.
The Public Service Loan Forgiveness program helps public servants who work for nonprofit, government, or tribal organizations get their student loans forgiven after 10 years' worth of qualifying payments. The PSLF limited waiver that expired on October 31 helped 236,000 public servants get their student loans forgiven. Before that, though, only 2% of eligible public servants who applied for PSLF actually received the relief they were promised.
Public servant Micah H., who asked Insider not to use her last name to protect her privacy, didn't want to take her chances with PSLF at all.
While she was in college and grad school studying social work, the 33-year-old knew about PSLF and planned to use the program to pay off her six-figure student loan debt down the line. However, after four years of working for the city of New York and watching her coworkers get rejected from PSLF, Micah decided to refinance her federal student loans with SoFi to lower the interest rate from 6% to 4% and pay them off herself.
Each year, after making extra payments on top of the monthly minimums, Micah refinanced her student loans again to lower the interest rates even more. By May of 2020, Micah had paid off her full balance — $115,355 in student loans.
There are three reasons she decided to skip PSLF altogether and pay off her student loans on her own.
1. She saw her eligible coworkers get rejected for PSLF
"At the time, I didn't see a lot of people getting their student loans paid off," says Micah. "So that, for me, was a really big concern."
A 2021 study by the Education Data Initiative shows that 30.7% of claims are denied due to incomplete paperwork, while 35.2% of applications have yet to be processed. Micah didn't want to go through 10 years of service and paperwork just to be denied at the end.
Micah says, "I had to do a temperature check of the environment. Nobody's getting their loans forgiven, and I can't take that risk of waiting, holding my breath, and eventually feeling this big sense of regret. So I said, 'Micah, just trust in yourself.' I just didn't wanna sit in my cubicle for 10 years and they eventually say, 'Oh no, that's not gonna work out.'"
2. Micah didn't want to limit her career options to nonprofit organizations
Micah tells Insider, "At the time, I was probably three or four years into PSLF, but then I was like, 'If I could be done in three years on my own, do I really want to stay in this realm for my career just for this to be paid off?'"
To qualify for PSLF, you need to make 120 eligible payments while working for a nonprofit, government, or tribal organization. You must also work for a qualifying employer when you apply for and receive student-loan forgiveness. Micah wanted to widen her career options outside of the nonprofit world.
She says, "By May 2020, I made my last payment. And that gave me the freedom to go to another work environment. If I'm being challenged or just want to do something else, then I can do that. That's the freedom I'm giving myself."
3. She didn't want her student loans hanging over her head for the next six years
During her debt payoff journey, Micah just wanted to be done with her student loans. She started paying off her loans while she was a freshman in college in 2007. She waited to finish paying off her undergraduate student loans before going to grad school at Columbia.
She had six years left in nonprofits until she could qualify for forgiveness through PSLF, but she didn't want her loans hanging over her head for that long.
She says, "I was so done talking about student loans. I need this to be done. I have other goals that I want to achieve. I want to increase my investment portfolio, get additional properties. I want to travel. I want to be a homeowner one day."
After becoming debt-free in May 2020, Micah and her husband, Demetrius, bought their first home in Maryland, where they hosted their wedding and welcomed their first child. She now shares her financial journey on her YouTube channel, Adulting with Micah.
Even though more reforms are on the way to help public servants get student-loan forgiveness, Micah tells Insider, "As someone who spent the past 13 years paying off student loan debt" — including payments she made during school — "it's exciting to see others receive student-loan forgiveness. For those who won't receive it, I hope my journey as an individual inspires others to start their debt-free journey."