Public Service Loan Forgiveness

In October, the U.S. Department of Education announced an overhaul of the Public Service Loan Forgiveness (PSLF) program that it will implement over the next year to make the program live up to its promise. This article explains that “when the loan forgiveness program started in 2007, its goal was to encourage workers to pursue careers in public service. After ten years of public service work, applicants – teachers, nurses, first responders, child welfare workers, librarians, mental health professionals, law enforcement officers, and many other professionals – would have the balance of their student loans forgiven, provided they’d made on-time payments of their loans. However, only a paltry few were ultimately given that relief because the task of applying for loan forgiveness was onerous, confusing, and misleading.”

Just days ago, National Public Radio reported that the U.S. Department of Education would reach out to federal student loan borrowers who may have been prematurely denied loan forgiveness under the revamped PSLF program and will reprocess their applications. It seems that FedLoan Servicing, which manages PSLF, continued to operate under the loan forgiveness program’s old rules for weeks after the announced overhaul. As a result, for at least three weeks, the servicer rejected the applications of some borrowers who appear to qualify for forgiveness under the new terms.

Lee Saunders, president of the American Federation of State, County, and Municipal Employees (AFSCME) — the largest trade union of public employees in the United States — applauded the changes to the revamped PSLF program. Saunders commented, “After years of pushing for Congress and past administrations to fix this program, AFSCME is elated that the courageous workers who keep our communities running every day will get the help they deserve.”