Public Service Loan Forgiveness Program Under Fire for Ineptness!

Dear Commons Community,

When Congress created the Public Service Loan Forgiveness (PSLF) program in 2007, lawmakers wanted to draw people to vital but relatively low-paid careers with a promise: after a decade, if borrowers faithfully paid their debts and pursued their work, they would have the remainder of their student loans written off.  Occupations such as firefighting, teaching, nursing, public interest law, and the military would qualify

Since then, tens of thousands of graduates were led to believe by their student loan servicers that they would receive relief of their loans at the end of a decade, only to be shocked when their applications were rejected.   The New York Times has a featured article today focusing on the PSLF problems.  Here is an excerpt.

“The blame can be spread broadly — to loan servicers who at best failed to inform borrowers of what was needed to qualify, to the single company in charge of the program that has been repeatedly cited for shoddy service, mismanagement and poor record keeping, to lawmakers who wrote in a baffling list of requirements, and to the Education Department, which has failed to step in and correct the problem…

Fewer than 1 percent of those who have applied for relief under the Public Service Loan Forgiveness program have been deemed eligible. Lawsuits are proliferating, along with dashed hopes…

More than 80,000 professionals have been denied the promised relief, through bureaucratic snafus, confusion over complex rules or just poor management. The first deadline came and went in 2017, and fewer than 1 percent of the 28,000 applicants received anything. Congress rushed to create an emergency “fix” fund last year — and it too had a dismal 99 percent rejection rate.”

The entire story of PSLF is a classic example of bureaucratic incompetence and much of the blame can be placed on the United States Department of Education under the inept leadership of Betsy DeVos.


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