WASHINGTON, D. C. – Attorney General Karl A. Racine has joined 10 states to urge the U.S. Department of Education Secretary Betsy DeVos and Federal Student Aid Acting Chief Operating Officer Jim Manning to address the severe shortage of applicants to the Public Service Loan Forgiveness (PSLF) program who have had their federal student loans forgiven. The PSLF program was created in 2007 to help student loan borrowers who aspire to give back to their country or community by working in a public service field. AG Racine along with 10 other state attorneys general in a letter expressed dismay at recent data ED released indicating that less than 1 percent of PSLF applicants have had their loans forgiven—a mere 96 people out of over 30,000 applicants.

“Secretary DeVos is denying hardworking teachers, first responders, and other dedicated public servants student debt relief they were promised for serving their communities,” said Attorney General Racine. “The Education Department must keep its promise to these student borrowers and immediately address any problems with the Public Service Loan Forgiveness program.”

For employees in public service who generally are paid lower wages than in the private sector, the PSLF program allows public servants to make payments based on their income and, after ten years, have the remainder of their loan balance forgiven. Borrowers across the country relied on this promise of loan forgiveness when they made the choice to work in public service.

Tens of thousands of District residents work in public service for both local and federal government agencies, and District residents have the highest student debts in the nation. Student loan borrowers in the District owe more than $46,000 in federal student loans on average, and more than one in four is carrying more than $80,000 in student debt. At the same time, there are over 200,000 workers employed by the federal government in the District, and over 32,000 workers employed by D.C. government.

AG Racine is calling for DeVos and Manning to make the following reforms to the PSLF program:

• Provide accurate and comprehensive information to borrowers about the program.
• Stop putting up roadblocks to requests for data. ED must provide states, in their consumer protection role, with the data necessary to diagnose and fix the problems to help borrowers.
• Call on Congress to expand the scope of the Temporary Expanded PSLF Program to include borrowers who made payments under the wrong loan program. The Temporary Expanded PSLF Program is a recent effort by Congress that provided $350 million in temporary relief for PSLF applicants who made payments on the wrong repayment plan.

In addition, AG Racine is demanding that student loan servicers counsel borrowers about the requirements of the PSLF program and how to fulfill them. Specifically, borrowers need to know whether they have a qualifying job, whether they are in a qualifying repayment plan, and whether they are in the right type of loan program. This need was highlighted by the United Federation of Teacher’s lawsuit filed yesterday against Navient for failing to provide adequate information to borrowers seeking to qualify for PSLF.

A copy of the letter is available here: http://oag.dc.gov/sites/default/files/2018-10/Problems-in-PSLF-Program-AG-Letter.pdf

Student borrowers seeking information about qualifying for public service loan forgiveness can access tips at: https://oag.dc.gov/blog/6-tips-make-sure-you-qualify-public-service-loan