Student Loan Related

DeVos Department of Education is Pulling the Rug Out From PSLF

Written by Steve Rhode

With the changes the Department of Education has been making under Secretary DeVos, it can come as no surprise that the promised loan forgiveness through the Public Service Loan Forgiveness (PSLF) program is MIA.

I’ve had an open Freedom of Information Act request for months now asking for data on how many PSLF applications have been approved since the first load became eligible in October of 2017. It has been delayed and stalled. No data has been forthcoming.

But new reports from Politico say that out of the 28,000 who have submitted applications for federal student loan forgiveness under PSLF, only 96 borrowers have been approved. Keep in mind that approval does not mean the loans have been forgiven yet.

“The Education Department said it had rejected more than 70 percent of the applications it processed because the borrower didn’t meet the program requirements. And department officials tossed out another 28 percent of the applications because they were missing information.”

I’ve heard from people that servicers have been making all sorts of claims for rejection. The most ridiculous one so far has the be the person who said they were making the full monthly payments as directed by their servicer but it was later claimed the payments were $1 short each month for approval to count.

I feel sick for a large number of people who embarked in careers in public service to assist people so they could earn the forgiveness of their loans under the program signed into law by President George W. Bush in 2007.

Before people start complaining that the PSLF program was a free lunch for many and they should not have their loans forgiven, let’s just look back at why the program was created.

A 2007 paper from Hofstra University laid out the history of the program and need for it. “Congress has significantly improved access to higher education, particularly graduate and professional education, for persons who would like to have lower-paying public service careers, but who will be saddled by high educational debts incurred to obtain the education that they need to serve the public,” the paper says. After all, the idea was to encourage bright minds into serving citizens.

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The 2007 paper goes on to say, “In a Hofstra Law Review article several years ago, I described the plight of many people who decided to go to law school so that they could serve those who were most in need, including low-income clients, criminal defendants, immigrants, and victims of domestic violence. These idealistic students often discovered, as graduation neared, that they owed so much on their educational loans that they could not afford to live on the low salaries offered by legal aid offices, public defender programs, and other nonprofit organizations, or on the modest salaries offered by many state and local governments.”

The idea behind the 2007 PSLF program was to “help all high-debt/lower-income borrowers to be able to pursue long-term public service careers in many different fields of work, including teaching, social work, military service, nursing, disability assistance, and emergency management.”

Congress was praised at the time for achieving “what it set out to do: provide some relief for all high-debt/low-income borrowers, while providing very substantial student loan repayment relief for those who make the sacrifice of choosing long-term, lower-income public service careers.”

So much for the best of intentions. The PSLF program is going to wind up hurting firefighters, police officers, emergency service workers, nurses, teachers, military servicemembers, and professionals who went into public service occupations.

PSLF was a promise made by law and it is being rapidly undone by Secreaty DeVos and whatever monster she has created at her Department of Education. It is looking like this is not going to be a promise kept and so many lives lived and careers embarked on to help others are going to be shattered.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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