A government watchdog had some pretty harsh words for the Department of Education and how it has chosen to implement a program aimed at forgiving the student loans of individuals who work in public service, which perhaps explains why 99% of those who apply for the program are being denied.
A copy of the report, issued by the General Accountability Office, is available by clicking here.
Congress created the Public Service Loan Forgiveness program in 2007. Individuals who work for certain public service employers for 10 years and make 120 payments are eligible to have their student loans forgiven. But because many of those individuals were entering into repayment plans that made them ineligible for the PSLF, Congress authorized $700 million for the Temporary Expanded Public Service Loan Forgiveness program. But only 1% of the 54,000 individuals who have applied for the TEPSLF have been approved, largely because the process for applying is “confusing for borrowers” and “is not aligned with Education’s strategic goal to improve customer service to borrowers,” according to the report.
One of the largest barriers for individuals is that along with filling out a TEPSLF application, they must also fill out a PSLF application, even though they are not eligible for that program. The Department of Education said the program was set up that way so the TEPSLF program could be quickly implemented, according to the report. More than 70% of the denials of TEPSLF requests are because the individual did not submit a PSLF application as well, according to the report.
The Education Department’s implementation is not “borrower-friendly,” the GAO said, and none of the servicers used by the department mention the TEPSLF program on their websites.
