The Public Service Loan Forgiveness Program is Broken — Let’s Fix It

Congress created the Public Service Loan Forgiveness (PSLF) program in 2007 to provide public service workers with student debt relief in exchange for a decade of service in their communities. Under the Trump Administration, the Department of Education and loan servicers mismanaged the PSLF program preventing teachers, nurses, servicemembers, and frontline workers from receiving the loan forgiveness they’ve earned. This includes a stunning 92 percent of Maine applicants who have been denied or rejected from the program.

Thousands of public service workers in Maine should benefit from the PSLF, including almost 33,000 public school employees. Each of these workers with student debt is supposed to be eligible for loan forgiveness after 10 years of public service, but 9 out of 10 applicants in Maine and nationally have been denied or rejected from the program.

An investigative report released by the American Federation of Teachers (AFT) and Student Borrower Protection Center (SBPC) revealed “the program has been mishandled and undermined by the Department of Education and its contracted loan servicers.” The report exposed “routine errors, poor recordkeeping, and conflicting policies throughout the process for determining whether borrowers’ employers qualify for federal loan forgiveness.”

Because of these problems and the complicated application process, over 5,000 employment certification forms submitted by Maine public service workers were rejected. Many prospective PSLF applicants are discouraged from even starting the application process.

To increase eligibility, Congress created the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program in 2018. Though the TEPSLF expanded the list of qualifying repayment plans to extend eligibility to more borrowers, 71 percent of Maine applicants were still rejected.

The AFT and SBPC maintain the program requires a complete overhaul and recommend the Department of Education expand its definition of “public service,” publish a registry of certified public service organizations, provide transparency around employment certification denials, and establish a straightforward appeals process. The Biden Administration has previously said it will prioritize fixing the PSLF system — now is the time to call them on that promise.

Maine Center for Economic Policy has joined hundreds of consumer advocates across the nation calling on President Biden to repair this broken program. The SBPC is collecting letters from people who have struggled with the PSLF program to pressure President Biden and the Department of Education to implement these recommendations. If you or someone you know has had trouble, please consider joining more than 5,000 people who have already shared their stories and demanded that public service workers aren’t left behind for the fourteenth year in a row.

Guest blog by Levi McAtee