A fix for the Public Service Loan Forgiveness program?

The Public Service Loan Forgiveness (PSLF) program has frustrated thousands of borrowers who took up careers in public service, worked to fulfill the program’s requirements, and then had their loan forgiveness applications rejected. Now, the U.S. Department of Education has quietly introduced a change expected to simplify the path to loan forgiveness, NPR reports.

99 percent rejection rate

Created by Congress in 2007, the PSLF program told student borrowers that, after they worked 10 years in government or not-for-profit roles and made 120 eligible student loan payments, the education department would forgive their remaining loan balances. However, the program requirements proved unwieldy, and Congress in 2018 created an expansion program, the Temporary Expanded Public Service Loan Forgiveness (TEPSLF), to better deliver loan forgiveness. 

In September 2019, a Government Accountability Office report revealed that the Department of Education had rejected TEPSLF applications from 99 percent of the 54,000 requests processed between May 2018 and May 2019, spending just $27 million of the $700 million Congress had allocated for the program. One major culprit—accounting for 71 percent of denials—was a requirement that borrowers must first apply for, and be rejected from, the PSLF in order to qualify for the TEPSLF.

Unifying PSLF and TEPSLF into one application

The Department of Education is now unifying both programs into one application to reduce confusion. Officials announced the change in the January 30 Federal Register.

“We believe borrowers will be better served by using a single form for both programs,” the Department of Education said in a statement, according to NPR. “So the point is to further reduce confusion and to eliminate the need for a borrower who completed the wrong form to complete a new form.”

Melissa Emrey-Arras, who led the Government Accountability Office’s investigation into the issues with the PSLF program, called the fix “a great move,” adding that “it is just so much simpler from a borrower perspective to have a single application.”

Lawmakers lauded the form consolidation but cautioned that the education department must do more to improve the PSLF application process. “The department’s lack of urgency in helping borrowers navigate the Public Service Loan Forgiveness Program has left applicants confused, panicked, and rightfully frustrated,” said Rep. Bobby Scott (D-Va.), who chairs the House education committee. “This change alone does not satisfy the department’s responsibility to faithfully implement the law.”

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