Attorney General James Urges Department of Education to Fix Broken Public Service Loan Forgiveness Program


To Date, Department of Education Has Denied Nearly All PSLF/TEPSLF Applications

NEW YORK – New York Attorney General Letitia James right now continued her battle to deal with the nation’s ongoing pupil mortgage disaster. As half of a coalition of 22 attorneys common, Attorney General James right now despatched a letter to the U.S. Department of Education, urging the company to take sturdy motion to repair the damaged Public Service Loan Forgiveness (PSLF) program. Since debtors first turned eligible for aid in 2017, nearly all PSLF purposes have been rejected, leaving thousands and thousands of public servants within the lurch. These academics, nurses, public curiosity attorneys, social staff, first responders, servicemembers, and others incurred important pupil mortgage debt so as to achieve the abilities essential to educate, heal, and defend our communities — underneath the promise {that a} portion of these loans would finally be forgiven. In right now’s letter, the coalition applauds the Department of Education’s dedication to bettering implementation of the PSLF program and urges the company to act shortly to repair the failures in this system’s administration.

“For 10 or more years, thousands of New Yorkers served our state and this nation, but the promises made to them for a decade of service didn’t even amount to a single penny,” mentioned Attorney General James. “Promises made must be promises kept, which is why we are, once again, calling on the Department of Education to immediately fix the Public Service Loan Forgiveness program and ensure that they make good on their commitment to help those who keep our country moving every day. Student debt has spiraled out of control and the economic impact of the pandemic has only made it harder for New Yorkers, as well as borrowers from all over the nation, to pay their bills. Now is the time for us to take bold action to end the student loan crisis and provide borrowers with the tools they need to move forward.”

In 2007, a bipartisan Congress created the PSLF program to encourage pupil mortgage debtors to enter public service jobs in return for forgiving the remaining stability of their federal pupil loans after 10 years of on-time mortgage funds. When the primary wave of debtors utilized for mortgage forgiveness in 2017, the Department of Education denied candidates on the alarming price of 99 %. In 2018, a bipartisan Congress gave the company a second likelihood to ship on the PSLF’s essential promise by creating the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. Despite this emergency repair, aid continues to be out of attain for almost all who apply. To date, the Department of Education has denied 96 % of all TEPSLF purposes.

Drastic motion by the Department of Education is required to make the promise of PSLF forgiveness a actuality for the nation’s devoted public servants. State attorneys common have a singular perspective on how to enhance administration of the PSLF/TEPSLF ensuing from their expertise investigating and holding pupil mortgage servicers accountable for violating the legislation, together with misadministration of the PSLF/TEPSLF program. In right now’s remark letter, the attorneys common urge the Department of Education to:

  • Provide instant aid to debtors who’ve been harmed by the misadministration of the PSLF/TEPSLF program;
  • Improve servicer oversight and accountability by fastidiously choosing a brand new servicer that can be responsive to debtors and creating new incentives and working procedures that put debtors first;
  • Extend the pause on funds on pupil loans that began in response to the coronavirus illness 2019 (COVID-19) pandemic;
  • Conduct broad outreach to all debtors doubtlessly fascinated by forgiveness, together with those that have but to apply and those that have already obtained denials; and
  • Affirmatively right errors found for all affected debtors.

Separately, however associated to her work preventing to assist pupil debtors with the PSLF program, in October 2019, Attorney General James sued the Pennsylvania Higher Education Assistance Agency (PHEAA) — one of the nation’s largest pupil mortgage servicers and the unique administrator of the PSLF program — for failing to correctly administer the PSLF program.

Additionally, in August 2019, Attorney General James despatched a letter to then U.S. Secretary of Education Betsy DeVos urging the Department of Education to present information to assist states deal with the continuing issues with the PSLF program.

Joining Attorney General James in sending right now’s letter to the Department of Education are the attorneys common of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.