Public Service Loan Forgiveness Will Be Easier To Get For Some

In 2008, Congress created the Public Service Loan Forgiveness (PSLF) program to encourage people to work in public service jobs. When they created it though, they ended up with a complicated program with many requirements. That came to bear in 2017 when the vast majority of applicants were rejected for forgiveness and Congress created an expansion of the program to address the issue, though it also had rejections. Thursday, the Department of Education cleared the way to make access to the expansion a little easier.

The expansion of PSLF, known as Temporary Expanded Public Service Loan Forgiveness (TEPSLF), was created after so many applicants were rejected. Of course, many of these applicants were rejected because they simply didn’t qualify. The program—which set aside a whopping $700 million—was meant to help those who should have qualified but didn’t due to poor communication and implementation. Many were public servants who applied to PSLF but were rejected because—unbeknownst to them—they were in the wrong repayment plan.

However, it soon became clear there were issues with this program too, as many more were also denied forgiveness under TEPSLF. A review from the Government Accountability Office found that nearly 40,000 applications were rejected for the simple fact that they hadn’t been rejected from PSLF first.

Senate Democrats—led by Democratic Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), Health, Education, Labor, and Pensions Committee Ranking Member Patty Murray (D-WA), and Senator Tim Kaine (D-VA)—sent a letter to the Department in October demanding it fix the management for TEPSLF. The letter condemned the Department for its “mismanagement.”

In the letter Senate Democrats said, “The Department cannot claim it has lacked resources to implement TEPSLF. Since Congress created TEPSLF in 2018, it has set aside $4.6 million for the Department to conduct outreach on both PSLF and TEPSLF to help inform borrowers of their options. Again, however, the Department failed to comply with Congressional intent in this area.”

Thursday, the Department took action and said it would create one application for both PSLF and TEPSLF. This would make it much easier as they could apply once and no longer be denied and forced to reapply if they qualified.

Senator Kaine applauded this announcement, “I’m glad the Department of Education listened to our repeated calls for a simplified process for borrowers seeking loan forgiveness. I hope the Department works to quickly ensure that public servants get the forgiveness they earned through years of tireless work for their communities.”

Earlier this year, Senator Kaine and Senator Kirsten Gillibrand (D-NY) introduced the What You Can Do For Your Country Act of 2019, which would revamp the PSLF program. Their bill would change the program so that borrowers can get debt relief sooner and more frequently. Student borrowers would no longer be forced to wait 10 years for relief and could see partial forgiveness sooner, with full relief after 10 years. Borrowers would also not be forced to stay in public service jobs for 10 years. Instead, they could receive partial forgiveness but could pursue other opportunities after.  

Wesley Whistle is a policy expert and is currently a senior advisor for policy and strategy at New America. Follow him on Twitter and connect with him on LinkedIn.