Warner, Kaine Call on DeVos to release information about public service loan forgiveness program

U.S. Sens. Mark Warner and Tim Kaine (both D-VA) joined a group of more than 150 House and Senate Democrats in requesting U.S. Education Secretary Betsy DeVos turn over more information regarding the Department’s flawed handling of the Public Service Loan Forgiveness (PSLF) program.

The program helps certain government or non-profit full-time employees receive loan forgiveness for the remaining balance of their federal student loans. The request follows the release of a new Government Accountability Office (GAO) report which revealed an alarming number of PSLF borrowers have been denied loan forgiveness. The report also showed the Department has neglected to provide clear guidance and instructions to loan servicers. This failure at the Department has left servicers and borrowers in the dark about which employers qualify and without detailed, accurate information regarding their loan payments.

“Consumer advocates, state regulators, Members of Congress, the Consumer Financial Protection Bureau (CFPB), and GAO have all repeatedly raised alarms about the Department’s handling of the PSLF program,” the Members wrote. “Not only has this Administration ignored the mounting warning signs… but it has actively reduced oversight of student loan servicers—thereby contributing to the current problems in student loan servicing.”

Additionally, official Department data recently showed that a shocking 99.6 percent of borrowers applying for PSLF have thus far been denied. Previous requests to Secretary DeVos to improve PSLF have been ignored, and the Administration has even proposed eliminating the critical loan forgiveness program entirely.

Members also requested a timeline for implementing each GAO recommendation, a copy of the Department’s corrective action plan, and further details about the Department’s plan to reach out to all Direct Loan borrowers about PSLF and to fully digitize the employment certification and application process. It is critical that Congress have this information as authorizers of the program and to make any potential legislative corrections. Sens. Warner and Kaine have both pressed the Department for increased clarity and consistency for PSLF borrowers, including in the April 2017 letter found here.

“We are deeply troubled that millions of dedicated public servants may not obtain the loan forgiveness that they deserve if the Department does not act quickly to correct program implementation issues,” the Members added.

Sen. Warner has introduced several bipartisan bills to improve transparency, accountability and affordability in higher education, and help borrowers better manage their student loan debts. The Dynamic Student Loan Repayment Act would make income-based repayment the default option for borrowers. The Employer Participation in Repayment Act would allow employers to apply pre-tax income to help their employees with student loan payments. Finally, the Empowering Students Through Enhanced Financial Counseling Act would promote financial literacy by providing students who are recipients of federal financial aid with comprehensive counseling services.

Sen. Kaine has led efforts to fix a glitch in the PSLF program that left some public servants facing mountains of unexpected debt because they had unknowingly been in the wrong repayment plan. In March, Congress passed Kaine’s legislation to allow those public servants to apply for the loan relief they had earned. The Trump Administration is responsible for administering the loan relief through the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) Program, but so far the Department of Education has created unnecessary hurdles for borrowers and rejected 88.4 percent of applicants. Kaine has pressed Secretary DeVos to turn things around by creating a simple process that gives fair consideration to the teachers, military personnel, law enforcement officers, and other public servants who apply for this debt relief.

To read the full text of their latest letter, click here. To read more about the GAO report entitled, “Public Service Loan Forgiveness: Education Needs to Provide Better Information for Loan Service and Borrowers,” click here. A summary of key findings can be found here.