Wednesday, Feb. 5, 2020 | 2 a.m.
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After years of teeth-gnashing frustration, tens of thousands of Americans with student loans may soon get relief that has been promised to them by the federal government.
Recently, it was reported that the Department of Education had adopted reforms to the Public Service Loan Forgiveness (PSLF) Program and a subsequent expansion of that program, which were designed to provide debt relief to college students who went into teaching, nonprofit charitable and advocacy work, positions in all levels of government and similar fields.
That’s great news, because the program — on paper — was government done right. In return for 10 years of work and 120 loan payments, the Department of Education would forgive the remaining federal student loan debt to qualified individuals.
If only it had been that simple.
Instead, PSLF went bad from the start when it was rolled out by the George W. Bush administration. The program was poorly communicated and suffered from overly rigid guidelines, which resulted in the vast majority of applicants being rejected.
Then, when federal lawmakers tried to fix the situation in 2018 by approving a $700 million expansion known as Temporary Extended Public Service Loan Forgiveness (TEPSLF), they only managed to add to the dysfunction.
The Catch-22 of a problem: To be eligible for TEPSLF, applicants must first have been rejected for the original PSLF relief through a completely separate application process. That ridiculous requirement led to 73% of applicants for TEPSLF being rejected during the first year of the extension. As the lead Government Accountability Office investigator told National Public Radio, the arrangement didn’t make a lot of sense from a borrower perspective “as to why you would need to apply for a program that you know you’re ineligible for.”
All told, more than 38,000 borrowers were rejected for TEPSLF due to the paperwork technicality involving PSLF.
To help them and make the process easier for first-time applicants, the Department of Education is fixing the program by consolidating the PSLF and TEPSLF under one application form.
“We think it’s a great move,” the GAO investigator said. “It is just so much simpler from a borrower perspective to have a single application. That way, you know, if you’re eligible for the regular Public Service Loan Forgiveness, you can receive it. And if you’re not, you can be considered for the Temporary Expanded process. It’s like one-stop shopping.”
Here’s hoping the repair job works.
People have taken out loans and made career plans counting on the program. They deserve the relief the government committed to them.
