Dear Secretary Cardona:
Thank you for your continued efforts to improve the Public Service Loan Forgiveness (PSLF) program. As you know, the limited PSLF waiver announced last year has already improved the lives of more than 164,0001 public servants who have had their student loans forgiven and 1 million2 who have received an average of one additional year of PSLF credit. Yet, we write today, as we believe that additional action is needed to ensure public servants-who have been on the frontlines of the COVID-19 pandemic and recovery-can access the PSLF waiver. Currently, only an estimated 15 percent of the 9 million public service workers with student debt have filed paperwork to track their qualifying payments under PSLF.3 The Department of Education (Department) will not begin its one-time review of accounts with extended forbearances and incorrectly recorded deferments, which could help borrowers make more progress toward PSLF relief, until later this year-potentially after Oct. 31, 2022. In addition, the Department recently unveiled its sweeping proposed regulations for improving student loan programs, including PSLF-which are currently on track to take effect on July 1, 2023. Thus, we request the Department extend the PSLF waiver deadline until at least July 1, 2023, in order to align with new changes under forthcoming rules and minimize confusion among borrowers.
The PSLF waiver announced by the Department last October was designed to “overhaul" the PSLF program and “make it live up to its promise" by allowing “all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan."4 To date, the waiver has been overwhelmingly successful in reducing barriers for borrowers to receive PSLF relief-accounting for almost all (89%) of the borrowers who have received forgiveness through the PSLF program through June 30, 2022.5 Moreover, the limited waiver is also a lifeline for Federal Family Education Loan (FFEL) borrowers who, for the first time, have seen their payments acknowledged in the PSLF program. Last summer the Department called the treatment of public servants with FFEL loans “a matter of equity,"6 but a single year of flexibility has not been enough to overcome years of “inaccurate information about eligibility for PSLF or Direct Consolidation Loans, resulting in deceptive acts or practices."7
Data indicates that only a fraction of the public servants who are eligible for PSLF have utilized the waiver. As of the end of June, the Department only has information from 1.3 million “cumulative PSLF borrowers with eligible employment and positive loan balance[s]," compared to the 9 million public service workers that the Student Borrower Protection Center identified earlier this year that could potentially be eligible for PSLF.8 As the Federal Reserve Bank of Richmond warns, this could leave millions of public servants at risk of missing out on the benefits of the PSLF waiver and its associated loan forgiveness.9
As more than 20 state attorneys general have pointed out, public service workers-particularly those in healthcare and education-continue to face challenges such as burnout and personal sacrifice to keep our nation safe during the pandemic and recovery.10 For many borrowers, the Department’s one-time review to fix forbearance and deferment failures, scheduled for later this year-potentially after Oct. 31, 2022-may be the first time that they learn that certain periods of deferment and forbearance could count toward both income-driven repayment (IDR) and PSLF programs. These borrowers may qualify for immediate forgiveness-especially given the PSLF waiver-or, at minimum, advance their progress towards PSLF relief. For many public servants, losing access to the PSLF waiver before they are able to benefit from the IDR payment adjustment could prevent them from being able to pursue forgiveness under PSLF.
Importantly, extending the PSLF waiver will also allow more military service members and federal employees to make progress towards PSLF. According to a 2021 report by the Government Accountability Office, 200,000 active-duty military service members have federal student loans-about half of whom have balances over $13,000.11 Reporting shows that military service members face troubling administrative hurdles in certifying their employment for the purposes of PSLF.12 The Department is currently working to ensure that all federal agencies or departments “automatically [provide] credit toward PSLF for military service members and federal employees."13 These data matches are critical to ensuring that the agency can identify which borrowers are eligible for PSLF and provide them automatic relief. By extending the PSLF waiver, more military service members and federal employees can benefit-maximizing the promise of the PSLF waiver.
Since the deadline of Oct. 31, 2022 to qualify for PSLF under the waiver program is rapidly approaching, we ask that the Department extend this deadline in order to ensure that all public servants with federal student loans are able to benefit from this historic waiver. Given the issues stated above, we also ask that the Department increase its outreach to public servants and borrowers to ensure that they are aware of the waiver and understand eligibility requirements, and correct any misinformation about the waiver being communicated by student loan servicers.
Sincerely,
