The Education Dept. stripped student-loan forgiveness from more than 4,500 teachers over minor paperwork errors

The Education Dept. stripped student-loan forgiveness from more than 4,500 teachers over minor paperwork errors
·3 min read
Teacher and students sitting together in a circle on the floor and wearing masks
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  • Over 4,500 teachers have been denied from a student-loan forgiveness program for public servants.

  • Reasons for rejection include minor paperwork errors or claims they are not public servants.

  • Teachers are supposed to qualify for the Public Service Loan Forgiveness program, but it's flawed.

  • See more stories on Insider's business page.

Teachers are meant to qualify for the Public Service Loan Forgiveness (PSLF) program, which forgives student debt for public servants such as government and nonprofit workers after 120 monthly qualifying payments. But new data revealed teachers who should have qualified never got relief.

The Student Borrower Protection Center obtained data from the Pennsylvania Higher Education Assistance Agency (PHEAA), which manages PSLF, and found the Education Department has rejected over 4,500 teachers from all 50 states from the program since July of last year. The reasons for those rejections included minor paperwork errors made by applicants, like missing a date next to a signature, while others were denied because their school did not qualify as a public service employer.

Certifying an applicant's employer qualifies for PSLF is meant to be "just a formality," the advocacy group wrote on Twitter, but "the reality is far worse."

"This is happening in all 50 states, & at schools in major cities and small towns alike," the group wrote. "Worse, these rejections are frequently due to errors caused by unnecessary bureaucratic red tape. The result: dedicated public service workers are being denied relief."

And the National Education Association released a report last month that found 45% of all teachers have student debt, with 42% of them having over a decade of experience in teaching - the amount of time PSLF requires borrowers to make payments before qualifying for debt relief.

These findings further emphasize the flaws in PSLF, which currently rejects 98% of borrowers. Insider reported earlier this month that if the program continues on its current track, it may see minor improvements, but still only approve 20% of borrowers for forgiveness by 2026.

President Joe Biden promised during his campaign to reform PSLF, given its high denial rate, and the Education Department has begun the process of implementing those reforms. But, as Insider reported, lack of communication from student-loan companies have made it very difficult for eligible borrowers to get relief.

And even for those who managed to get relief through PSLF, it wasn't easy. Insider spoke to David O'Keefe, a public servant who succeeded in getting his remaining $20,000 student debt balanced wiped out through the program, but he was mistakenly told he wasn't eligible and had to conduct follow-up after follow-up to ensure his paperwork was being processed accurately.

"It was the same thing again and again," O'Keefe said. "It was extremely frustrating."

The Education Department has opened a public inquiry for comments on how it should reform PSLF, and it has received over 33,000 responses to date.

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