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- 56 Democrats urged Education Sec. Miguel Cardona to fix the Public Service Loan Forgiveness program.
- The letter cited its high denial rate, with fewer than 2.5% of eligible applicants being approved.
- Biden campaigned on fixing the program to give public service workers needed relief.
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President Joe Biden campaigned on reforming the Public Service Loan Forgiveness (PSLF) program, which he – along with many lawmakers in past years – said is failing borrowers due to its low approval rate.
His campaign website said: "Biden will see to it that the existing Public Service Loan Forgiveness Program is fixed, simplified, and actually helps teachers."
On Wednesday, 56 Democratic lawmakers urged Biden to follow through on his promise.
Senate and House Democrats, led by Sens. Tim Kaine of Virginia, Kirsten Gillibrand of New York, and Rep. John Sarbanes of Maryland, wrote a letter to Biden's Education Secretary Miguel Cardona stressing the need to improve the PSLF program to give public servants the loan forgiveness they deserve.
The PSLF program allows government and nonprofit employees with federally backed student loans to apply for loan forgiveness after proof of 120 monthly payments under a qualifying repayment plan, but 98% of all borrowers from the general public have been rejected from the program.
"After the first round of forgiveness initially became available to PSLF borrowers more than three years ago, approval rates for the program have remained below 2.5%," the letter said. "The program has been beset by numerous 'donut holes' that disqualify certain types of loans, repayment plans and the payments themselves, leading to extraordinary confusion and distrust of the PSLF program and, by extension, the federal government."
The lawmakers urged Cardona to waive barriers in PSLF, including to:
- Expand the definition of an "eligible loan" to include all federal student loans;
- Make all repayment plans eligible for PSLF;
- Waive the restriction that requires a borrower to be in public service at the time of loan forgiveness;
- And establish data-sharing agreements with the Dept. of Defense and Office of Personnel management to automatically identify public service workers with outstanding student debt.
The letter also called for extensive communication from the Education Department to borrowers to ensure they are aware of any changes that might impact loan forgiveness.
In past weeks, lawmakers from both parties have introduced legislation to reform the PSLF program. Last week, Sen. Marco Rubio of Florida and Sen. Maggie Hassan of New Hampshire introduced the Recognizing Military Service in Public Service Loan Forgiveness (PSLF) Act, which allows service members who deferred their student loan payments while deployed to count that period of time toward their PSLF progress.
This followed a a Government Accountability Office report that found that 287 Dept. of Defense personnel had received loan forgiveness as of January 2020, while 5,180, or 94% of DOD borrowers, were denied. Sen. Elizabeth Warren released a statement calling the findings, and PSLF, "nothing short of a disaster."
Education Secretary Betsy DeVos was sued multiple times over the program's high denial rate.
Sarbanes said on Twitter: "We must ensure that America's teachers, social workers, public defenders, service members and community health care workers - along with many other public servants - receive the student loan forgiveness they have earned."