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- The Education Dept. opened a public inquiry for comments on the Public Service Loan Forgiveness program.
- In just over a month, over 33,000 people responded, citing the difficulties in getting relief.
- PSLF rejects 98% of public servants who apply, and Biden campaigned on fixing the program.
- See more stories on Insider's business page.
The Education Department has begun the process of following through on President Joe Biden's campaign promise to fix the Public Service Loan Forgiveness (PSLF) program. That means it opened a public inquiry for anyone to submit a comment, suggestion, or complaint regarding the program.
In just over a month, more than 33,000 people have responded.
PSLF is supposed to wipe out student debt for public servants after they complete 120 monthly qualifying payments. But the program rejects 98% of applicants, which is why Biden campaigned on fixing it to give public servants, like teachers and nonprofit workers, the student-debt relief they deserve.
Part of the process is the implementation of a series of new regulations. The Education Department's regulatory agenda, released in June, opened a window in July for anyone to submit a comment on the PSLF program. According to the Federal Register, since July 26, 33,396 people have participated in the public inquiry and there are two weeks left for others to do so.
Many of the comments, which can be viewed publicly, noted confusion around the PSLF process, in which people who thought they were entitled to relief and completed the necessary payments were told they did not qualify, without a clear explanation.
Insider previously reported on a borrower who managed to get his remaining $20,000 in student debt wiped out, but it took over 10 years and him overcoming the mistaken finding from FedLoan Servicing, which manages PSLF, that he didn't qualify.
"I spent a lot of time calling and following up," the borrower said. "I even contacted my congressman's office with no response, and eventually, I got a notice from my servicer, and they did it wrong. They said I was not eligible for student-loan forgiveness, and I was devastated."
"It was the same thing again and again," the borrower said. "It was extremely frustrating."
On August 19, he finally got the notice his loans were forgiven - half a year after they should have been. "I read that notice four times to make sure I was reading it right and had my wife read it, too," he said.
And if the Education Department does not act soon to reform the program, borrowers are not likely to see improvements anytime soon. The Student Borrower Protection Center released projections on Thursday that found, via a Freedom of Information Act request, that if PSLF continues accepting borrowers at its current pace, only 20% will get relief by 2026 - just 276,370 people.
The advocacy group wrote in a blog post that the "projections make clear that without sweeping change along these lines, hundreds of thousands or even millions of student loan borrowers will continue to face broken promises and shattered financial futures. We cannot continue choosing that future."
source https://www.businessinsider.com/public-service-loan-forgiveness-program-student-debt-reforms-education-dept-2021-9