Education Dept. to Fix Student Loan Forgiveness Program That Rejects 99 Percent of Applicants

January 31, 2020 Updated: January 31, 2020

The U.S. Department of Education is proposing to revise the confusing application forms of the Public Service Loan Forgiveness (PSLF) Program, which declined nearly 99 percent of loan relief requests in the first year of its expansion.

The PSLF program was created in 2007 to encourage college graduates to pursue public service careers. Borrowers who spend 10 years at public service jobs such as teaching, nursing, and policing while also making 120 monthly payments towards their student loans could request to have the remainder of those loans wiped out. In May 2018, the Education Department introduced Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program, which provides limited loan relief for borrowers who have trouble obtaining PSLF loan forgiveness because they are on repayment plans that are not eligible for PSLF.

However, only a tiny portion of applicants was approved for TEPSLF from May 2018 through May 2019. In fact, the loan forgiveness program turned away 99% of applications during that period, as the data released by the Office of Federal Student Aid suggests. As many as 38,000 applicants found themselves denied by TEPSLF simply because they hadn’t first applied for PSLF, which they already knew they weren’t eligible for.

“The process can be confusing for borrowers who do not understand why they must apply separately for PSLF—a program they are ineligible for—to be eligible for TEPSLF,” the U.S. Government Accountability Office (GAO) said in a September 2019 report. “Requiring borrowers to submit a separate PSLF application to pursue TEPSLF, rather than having an integrated request such as by including a checkbox on the PSLF application for interested borrowers, is not aligned with Education’s strategic goal to improve customer service to borrowers.”

The Education Department posted its plan to tackle the problem to the Federal Register on Jan. 30. The fix is simple—the two application forms for corresponding programs are merged into just one so that borrowers applying for TEPSLF will no longer have first to submit a separate application for PSLF.

“We think it’s a great move. It responds to our recommendation,” Melissa Emrey-Arras, director in GAO’s Education, Workforce and Income Security team, told NPR News. “It is just so much simpler from a borrower perspective to have a single application. That way, you know, if you’re eligible for the regular Public Service Loan Forgiveness, you can receive it. And if you’re not, you can be considered for the Temporary Expanded process. It’s like one-stop shopping.”