Meet a 62-year-old veteran with $104,000 in student debt after working in public service for 4 decades: 'I joined the army to escape poverty. This is a different kind of poverty.'

• Jeffrey Spencer, 62, thought serving in army would grant him a free education through the GI bill.
• But Congress did not renew the bill. Now he has $104,000 in student debt and works in public service for the state of California.

When Jeffrey Spencer joined the army in 1976 at the age of 17, he thought the GI Bill would allow him to gain a free education. But when his service concluded eight years later, Congress had sunsetted a version of the bill, and he was stuck paying for his degree - something he did not intend on doing after serving his country.

Now, at 62 years old, Spencer works for the state of California as a land-use planner. Though he has been working in the public sector for 40 years, he has not been able to qualify for the federal government's Public Service Loan Forgiveness (PSLF) program and is struggling to pay off his $104,000 debt load.

"I served my country as I was asked, and you can't even give me the college that you promised," Spencer told Insider. "And I wouldn't have had these student loans had I had my GI Bill. But now, I'm faced with all this debt. What a slap in the face."

It took Spencer 12 years to obtain his associate's degree in business administration and management in 1999 because he could only take night classes while working full-time and raising a family. He also took a period of time off to fight for his rights under the GI bill.

PSLF was created in 2007 to forgive student debt for public servants, like government workers at teachers, after they made ten years of qualifying monthly payments. Spencer applied right away with the hopes he could get his payments counted toward eventual forgiveness - and was promptly rejected.

He then applied under President Barack Obama, and was rejected again.

The rejections came because his student-loan company had previously advised him to consolidate his loans under the Family Federal Education Loan (FFEL) program, which are privately funded and do not qualify for PSLF. Spencer was not aware of this.

"I'm not an uneducated person here," Spencer said. "But when they refinanced my loans, and they didn't tell me they were converting it to something that wouldn't qualify, that, to me, is a shell game. And that's why this country is facing such a student debt epidemic."

'All these promises made are continually broken'

While Spencer says he now makes a decent salary, he had to defer his loan payments when the pandemic began because he could not afford them on top of supporting his two kids and his wife, who is also caring for her 92-year-old mother. His deferment period ends in December, though, and his only hope right now is the recent reforms to PSLF.

Last month, the Education Department announced an overhaul of the program that would implement a temporary waiver to allow any form of past payments to qualify for PSLF. Spencer is in the process of reconsolidating his loan to be eligible for that waiver, but if is not approved, he is looking at monthly payments of $650 when the federal payment pause resumes in February, which he cannot afford.

"I don't really have a whole lot of hope because they've always managed to weasel out somehow, and I don't qualify for this reason or that reason," Spencer said. "All the promises made are continually broken, and we're left holding the bag."

Although FFEL loans like Spencer's do not qualify for federal loan forgiveness, the department's PSLF reforms are giving those borrowers another shot to get their loans to count. Even for borrowers who should qualify, PSLF has run up a 98% denial rate since 2017, leaving thousands of public servants disappointed and burdened with debt. This overhaul is intended to change that.

A spokesperson for the Pennsylvania Higher Education Assistance Agency (PHEAA), which manages PSLF, referred Insider to a letter from Federal Student Aid head Richard Cordray addressing confusion that borrowers are facing, saying that "complex changes of this magnitude are hard to process and execute."

"But we will get the changes made, and I pledge that to you today," Cordray said. "We ask for your patience as we move forward."

Still, Spencer believes he should never have had to jump through hoops to seek loan forgiveness in the first place. He is simply asking for Congress to deliver on what he was promised: student-loan forgiveness for serving well over ten years in public service.

"There's just no way to get ahead," Spencer said. "I joined the Army to escape poverty, and now, this is a different kind of poverty. It's a constant weight on your shoulders. How can you induce people to serve the public if this is the way you treat them?"

Do you have a story to share about student debt? Reach out to Ayelet Sheffey at asheffey@insider.com.