In the wake of damning government reports and media investigations, the U.S. Department of Education has for teachers and other public servants to apply for student loan forgiveness.
Last year, a government watchdog report found that under the Temporary Expanded Public Service Loan Forgiveness were rejected by the department. The majority of the denied requests were due to paperwork errors.
The department鈥檚 fix, announced today and , will simplify the amount of paperwork needed to go through the forgiveness process and 鈥渞educe confusion.鈥�
The Public Service Loan Forgiveness program, which was established in 2007 and began reviewing applications in 2017, is meant to erase the student debt for certain public-service workers, including teachers, after borrowers make 120 monthly payments toward their loan over the course of a decade or longer. However, the department was initially approving so few applications that federal lawmakers stepped in to create a temporary expanded program in hopes of giving some workers a second chance at applying for loan forgiveness. Congress allocated $700 million to the expanded program.
But that expansion hasn鈥檛 worked: The Education Department required borrowers who were applying for loan forgiveness under the temporary expanded program to submit a separate PSLF application鈥攅ven though they were ineligible for PSLF. This was confusing for borrowers, and the U.S. Government Accountability Office found that 71 percent of denied requests鈥攆rom more than 38,000 applicants鈥攚ere rejected because the borrower hadn鈥檛 submitted a PSLF application.
Now, borrowers applying for the expanded program will no longer have to first file a separate application for PSLF. Instead, a single form will work for both programs.
鈥淲hile we cannot change the fundamental problem of having to administer a program designed to serve only a small fraction of the borrowers, we are doing our best to at least remove unnecessary administrative burden,鈥� the department told NPR.
, the Public Service Loan Forgiveness program has complex requirements and the rules have been poorly communicated to borrowers. The department has outsourced the paperwork and call centers to loan servicers, who have been criticized for providing inadequate information to borrowers. Many borrowers would make it years into the repayment process before being told they didn鈥檛 qualify for loan forgiveness.
Last summer, over what the lawsuit alleges is 鈥済ross mismanagement鈥� of the federal loan forgiveness program. , AFT President Randi Weingarten said the fix announced today doesn鈥檛 go far enough.
鈥淔rankly, this move shows just how easy it would be for the department to strengthen the program if it wanted to protect people instead of student loan servicing companies that make money off their debt,鈥� she said. 鈥淏ut this 鈥榝ix鈥� is a Band-Aid that does little to heal a gaping wound; it鈥檚 a paperwork solution to a monumental problem.鈥�
In 2018, AFT also brought forth a separate class-action lawsuit against Navient, one of the largest federal student loan servicers, from nine teachers who alleged that the provider gave borrowers 鈥渋naccurate and misleading information鈥� about their eligibility for Public Service Loan Forgiveness for financial gain. If a borrower is accepted to the federal forgiveness program, the loan is transferred and Navient no longer receives servicing fees.
鈥淛ust like every other teacher, I struggle to make my mortgage payments, to pay for day care, to keep food on my table鈥擨 struggle every day,鈥� said Megan Nocerino, one of the teacher plaintiffs in the lawsuit, told 澳门跑狗论坛 in 2018. 鈥淲hen you trust someone with a loan, or with your credit, or with anything鈥攖hey should have your back.鈥�
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