More Than 200 Organizations Representing Millions of Educators, Workers, and Veterans Demand Immediate Action to Fix the Broken Public Service Loan Forgiveness Program
September 22, 2021 | WASHINGTON, D.C. — Today, more than 200 organizations representing millions of public service workers from all corners of the country called on President Biden to fix the broken Public Service Loan Forgiveness (PSLF) program and deliver promised student debt relief to borrowers. In response to the U.S. Department of Education’s public inquiry into the PSLF program, the organizations sent a letter today making the case directly to President Biden and Secretary Cardona that PSLF is broken and that sweeping action to deliver debt relief is urgently needed for America’s frontline workers, educators, healthcare workers, servicemembers, and other public service workers.
The letter to Secretary Cardona can be found here: https://protectborrowers.org/PSLF-Coalition-Letter
In July, for the first time ever, the U.S. Department of Education launched a public inquiry into the badly broken PSLF program, which has a borrower rejection rate of 98 percent. In response, nearly 45,000 comments from borrowers and organizations have flooded in, illustrating the far-reaching, devastating effects of PSLF breakdowns. People explain how they planned their lives around promised forgiveness, only to be let down by the federal government and the companies charged with managing the program and helping borrowers access relief. Stories of financial ruin, distress, and broken promises have only worsened during the pandemic as workers continue to fight on the front lines of the public health crisis or have faced job upheaval, cut hours, or lost wages.
In the past several months, the Administration has made progress in delivering debt relief to permanently disabled people, defrauded students, and deployed service members. Now the Administration must take action to fix the PSLF program.
The Biden Administration campaigned on the promise to “make loan forgiveness work for public servants”—delivering debt relief to public service workers across the country. Secretary Cardona has affirmed this commitment, promising to revisit the government’s approach to PSLF and “honor those who choose to engage in public service.”
The Administration cannot deliver on this promise without taking sweeping action to overhaul the government handling of PSLF. New data released by the SBPC shows that without immediate action, PSLF problems will continue to persist over time. Specifically, 8 out of 10 borrowers pursuing PSLF will still not have secured promised loan forgiveness by 2026—nearly two decades after the launch of the program.
Background
The Public Service Loan Forgiveness program was created in 2007 to provide relief to public service workers with student loan debt in exchange for a decade of service in their communities or to our country.
Unfortunately, since its inception, the program has been mishandled and undermined by the Department of Education and the student loan industry. As a result, the program now has a 98 percent rejection rate—and the expansion meant to fix it has a 97 percent denial rate. Underlying these statistics, millions of public service workers have been cheated out of their right to loan forgiveness guaranteed under federal law. Across the country, public service workers are now forced to shoulder debts that should have been canceled under the law.
A broad coalition of stakeholders including veterans service organizations, legislators, consumer advocates, and labor organizations representing millions of public service workers have all called on the Biden administration to restore the promise of PSLF as part of a comprehensive effort to repair the broken student loan system. The SPBC has partnered with many of these organizations to host large events featuring borrower stories and demands for action to deliver promised debt relief.
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The Student Borrower Protection Center is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. The SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.