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After years of on-time payments, these Utah educators’ student loans have been forgiven

Both educators had qualified for public service loan forgiveness but neither was awarded it despite years of payments and working for qualifying employers — until now

SHARE After years of on-time payments, these Utah educators’ student loans have been forgiven

John Arthur, a sixth grade teacher and Utah’s 2021 Teacher of the Year, poses for a portrait in his classroom at Meadowlark Elementary School in Salt Lake City on Wednesday, Sept. 27, 2023. Arthur is just a few payments away from having his student loans forgiven.

Kristin Murphy, Deseret News

Like the tens of millions of student loan borrowers across the country, Utah educators John Arthur and Sarah Reale’s loan payments were on hold as part of pandemic relief.

Both anticipated resuming their payments after Congress passed a law that prevented further extensions of the payment pause, meaning interest on student loans would accrue starting Sept. 1, with payments due in October.

Then, the unthinkable happened: After more than a decade of on-time payments she believed would eventually earn her relief under Public Service Loan Forgiveness Program, Reale, who teaches political science at Salt Lake Community College, got a letter from a Department of Education loan servicer that said her loans had been forgiven.

“I didn’t believe it. I sort of didn’t even celebrate it until I finally logged on to my account and saw that my balance was zero,” said Reale, who is also SLCC’s director of digital marketing

“I actually over qualified once they totaled my payments correctly,” explaining she made 134 to 140 payments and the program requires a minimum of 120.

Arthur, who teaches sixth grade at Salt Lake School District’s Meadowlark Elementary School and was Utah Teacher of the Year in 2021, also got good news after years of fits and starts over promised relief that didn’t materialize.

“I’d given up all hope,” said Arthur.

According to a September 2020 U.S. Department of Education report, among 229,215 applications to the federal Public Service Loan Forgiveness Program, 205,744 were deemed ineligible — just shy of 90%. Some of the reasons included missed payments, missing information or the loans were ineligible.

After Reale graduated from Utah State University in 2010 with a master’s degree in politics and policy, her student loan debt was around $55,000.

More than a decade later, her loan balance was more than $40,000, despite working full time while earning her undergraduate and graduate degrees.

On the advice of a government loan servicing employee, Reale consolidated her loans. As a consequence, she lost years of credit toward the Public Service Loan Forgiveness program.

Meanwhile, interest rates on her loans fluctuated wildly, from 2% to 12%.

“The fact that the government has charged such high interest rates on these borrowers is unfair,” she said in a previous interview.

Reale’s attempts to work with loan processors to recalculate her credits toward loan forgiveness hit roadblock after roadblock, she hired GradFin, which helps borrowers refinance loans at lower interest rates and stay in compliance with the Public Service Loan Forgiveness program.

Arthur believed he was on the path to public service student loan forgiveness, a program that calls for 10 years of on-time and consecutive monthly loan payments in order to be considered for discharge of the loan balance.

Arthur, who had about $40,000 in student loan debt after earning master’s degrees in teaching and education from Westminster College, opted to participate in the income-based repayment program.

After several years of on-time student loan payments, Arthur learned of another loan forgiveness program that offered $5,000 in student loan forgiveness for educators who teach at Title I schools.

He applied for the $5,000 of relief and received it, but it reset the clock on credits toward public service loan forgiveness.

Arthur said he credits the Biden administration for taking time and initiative to remedy past wrongs that meant relatively few borrowers qualified for public service loan forgiveness.

“It’s amazing the difference it’s going to make not just in my life, but especially for my colleagues to have this weight off our shoulders. It’s gonna be incredible,” he said.

Arthur said his loan payments before the pandemic pause were about $500 monthly, he said.

Arthur’s spouse works in the private sector so they have more resources than many of his colleagues who are sole income earners and likewise paying down student loan debt.

“If they could just get out from underneath this debt in the not-too-distant future then other possibilities towards building generational wealth become possible, like home ownership,” he said.

Qualifying for public service loan forgiveness was especially good news after a large-scale student loan relief initiative proposed by the Biden administration was halted by a Supreme Court decision that said the executive branch overstepped its authority when it announced that it would cancel up to $400 billion in student loans.

Some 43 million Americans would have benefitted from the large-scale loan forgiveness program, federal officials said.

According to the Education Department, student loan balances forgiven under public service loan programs are not considered income for federal tax purposes but state laws may vary.