October 6, 2021 | WASHINGTON, D.C. — Today, the Department of Education announced steps to overhaul the notoriously troubled Public Service Loan Forgiveness program. In response to this announcement, Student Borrower Protection Center Executive Director Seth Frotman released the following statement:
“This is a good day for teachers, nurses, servicemembers, and millions of workers serving on the front lines of the pandemic. For too long, those who give the most to our communities and our country have been given the runaround and forced to shoulder debts that should have been canceled. The Biden administration is taking a critical step towards alleviating that burden for our public service workers.
Since this programs’ shocking abuses surfaced a decade ago, politicians and policymakers have failed to take action to right its course. President Biden and Secretary Cardona have stepped up. With the stroke of a pen, they are improving the lives of hard-working families across the country and showing this Administration’s commitment to repairing the broken student loan system.”
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 federal government and the student loan industry. As a result, the program 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 have been 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 tens of 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.
In response, the Biden administration launched a public inquiry into the many failures of PSLF, seeking direction from the public on a path forward. In response, more than 45,000 borrowers shared their stories and more than 200 organizations representing tens of millions of public service workers urged President Biden and Secretary Cardona to take the actions announced today.
Additional information about the efforts by borrowers and their advocates fight for the changes announced today is available here:
https://protectborrowers.org/wp-content/uploads/2021/10/PSLF-Memo-10.21.pdf
Information on the SBPC’s ongoing investigations into the Public Service Loan Forgiveness program is available here:
https://protectborrowers.org/public-service-loan-forgiveness-2/
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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.