Biden wants to hear the public's stories about the student-loan-forgiveness program with a 98% denial rate

Biden wants to hear the public's stories about the student-loan-forgiveness program with a 98% denial rate
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  • The Education Dept. is launching a public inquiry on the Public Service Loan Forgiveness program.

  • The program, which is supposed to forgive public servants' student debt, rejects 98% of applicants.

  • Anyone can submit comments, which the department says it will consider when making improvements.

  • See more stories on Insider's business page.

If the Public Service Loan Forgiveness (PSLF) program worked as it should, every qualifying public servant would be able to receive student-debt relief after 120 qualifying monthly payments. But complicated paperwork and eligibility requirements have made it so that 98% of applicants have been denied relief, even if they qualify.

That's why the Education Department on Friday launched a public inquiry to fix the program.

"Unfortunately, for too many public service workers, the program has not functioned the way they hoped it would," Julie Margetta Morgan, a senior advisor and the acting undersecretary for the Office of the Under Secretary of Education, wrote in a blog post.

"Fixing the PSLF Program has been a priority for the Biden-Harris Administration since day one," she added. "While we have identified many opportunities for improvement by talking to experts and borrowers and reviewing our procedures, we want to hear from you as well."

President Joe Biden campaigned on reforming PSLF following its high denial rate under President Donald Trump, and fixing the program was even included in the Education Department's regulatory agenda that was released last month. But implementing changes to the program could take at least a year, and the public inquiry would help the department more easily identify the problems it needs to fix.

Starting next week, anyone can submit comments to the department regarding PSLF, and the department specifically wants to know:

  • What features of PSLF are most difficult to navigate?

  • Which barriers are preventing public servants from receiving student-loan forgiveness under PSLF?

  • For borrowers who have had loans other than from the direct-loan program, what have your experiences been trying to access or participate in PSLF?

Many Democratic lawmakers have pushed to reform the program to give public-service workers student-debt relief. In May, 56 Democrats sent a letter to Biden urging him to quickly reform the program and eliminate the "extraordinary confusion" it places on borrowers.

They wrote: "The program has been beset by numerous 'donut holes' that disqualify certain types of loans, repayment plans and the payments themselves, leading to extraordinary confusion and distrust of the PSLF program and, by extension, the federal government."

Seth Frotman, the executive director of the Student Borrower Protection Center - which advocates for borrowers' rights - said in a statement that the move by the Education Department to launch a public inquiry "offers hope for public service workers who have been let down and cheated out of promised debt forgiveness."

"For the first time, the federal government is asking those who depend on the program to help decide what comes next," he said.

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