Press Release
CSS Applauds USDOE Overhaul of Public Service Loan Forgiveness Program
The Community Service Society applauds the U.S. Department of Education (USDOE) for announcing a major overhaul to the Public Service Loan Forgiveness Program (PSLF).
Created in 2007, PSLF is premised on incentivizing people who might otherwise pursue more lucrative fields after obtaining advanced degrees to instead consider careers in public service. It allows those who work in the public sector, such as educators, nurses, nonprofit professionals, and members of the armed forces, to have their student loans forgiven after making qualifying payments for ten years.
However, for years the program has been plagued by loan servicer misconduct.
Action by the USDOE on this issue is a critical step toward reversing some of the damage done by loan servicer noncompliance and lack of program oversight. Thousands of borrowers across the U.S. and in New York State would be eligible to have their loans forgiven. Given that borrowers will only have until October 31, 2022, to take advantage of this vital relief, it is imperative for Congress to act to create and fund student loan Consumer Assistance Programs (CAPs), like EDCAP. These programs will ensure borrowers have access to the help they need to ultimately benefit from this relief and eliminate their student loan debt.
It is also in the best interest of the Biden administration to ensure these program fixes actually work. The last thing we need is a repeat of what happened with the federal government’s $46 billion rental relief program which struggled to get needed relief to distressed renters.
Three student loans servicers—FedLoan, Granite, and Navient— have now announced they will stop servicing federal student loans. This means that about 16 million federal student loan borrowers will be transitioned to a new servicer around the same time the federal government will lift moratoriums on federal student loan payments and interests. Problems can and will occur as a result of these transitions with borrowers bearing the brunt. This is yet another reason why we must make sure borrowers have access to unbiased and free assistance.
Creating and funding student loan debt CAPs is a cost-effective measure that can play a key role in making sure USDOE’s fixes work and that we have an equitable COVID recovery, particularly for borrowers who are struggling with their student loan debt.