Congress Promised Student Borrowers A Break. Education Dept. Rejected 99% Pt II
The Education Department “has not created a borrower-friendly TEPSLF process,” the GAO says. “This does not align with Education’s strategic plan objective to improve the quality of service to customers across the student aid life cycle.”
The Austins found the process so confusing that after being rejected for TEPSLF, instead of further pleading their case with their loan servic-er or the Education Department, they contacted one of their U.S. senators. And members of Congress are listening.
“[The Education Department has] not competently administered this program,” says U.S. Rep. Bobby Scott, a Virginia Democrat and chairman of the House education committee. He vows to hold public hearings about the department’s handling of PSLF and now TEPSLF.
“The students are entitled to it,” Scott adds. “They have fulfilled their responsibility over a decade of public service, and they’re entitled by law to have those loans discharged. … It is the constitutional responsibility of the executive branch to take care that the laws be faithfully executed, and we will focus public attention on the fact that they are not doing it.”
Congress created the Public Service Loan Forgiveness in 2007, hoping to encourage promising college graduates into public service careers. In return for 10 years of government or not-for-profit work and 120 qualified student loan payments, borrowers were told the U.S. Department of Education would forgive whatever remained of their federal student loans. But the program’s requirements are so rigid, and were so poorly communicated in those early days, that the overwhelming majority of borrowers have, so far, been rejected. The Austins, for example, appear to have run afoul of PSLF when their first son was born and Heather took a year off from work. They requested and received a one-year deferment. But when the couple resumed making payments, they did not realize — and they say they were never told — that their new repayment plan disqualified them from loan forgiveness.As of March 2019, 99% of Public Service Loan Forgiveness requests have been rejected, and applicants remain deeply confused about the program’s rules. “This wasn’t a puzzle or a lottery,” says Rep. Scott. “This is a program where, if you fulfill your responsibilities … then your student loan would be forgiven. It’s just incredible that we had to, last year, pass legislation … to create an emergency program.” Now, Scott says, it is inexcusable that this emergency program is rejecting borrowers’ requests for loan forgiveness at the same rate — 99% — as the troubled program it was meant to alleviate. In its new review, GAO investigators also criticize the Education Department for not clearly explaining to borrowers how the program works or how they can contest a denial. For example, the GAO report says, when borrowers are rejected for TEPSLF, the letter they receive does not clearly explain the options for requesting a second review of their claim. Investigators also point out that, given the high potential for error by the company that manages TEPSLF, it “is especially important” that borrowers understand how to dispute an erroneous rejection. While the vast majority of borrowers’ TEPSLF requests (71%) were denied because they had not yet applied for PSLF, 10% of the requests were rejected because borrowers had not been repaying their loans for a full 10 years. Another 6% got hung up on a technicality created by Congress: When borrowers apply for help, their most recent payment, as well as the payment they made 12 months before applying, must be equal to or greater than what they would have paid on an income-driven repayment plan. “That was ridiculous,” says Lana Scott, whose TEPSLF application was among the 6% that were rejected because her recent payments were not considered adequate. After being denied PSLF, Scott says she called her loan servicer and asked exactly what she would need to do to qualify for TEPSLF. “None of it was actually told to me over the phone.”
In this new review, GAO investigators push the Education Department to make it easier for borrowers to find information about the program’s strict requirements. For example, the department has an online help tool for people hoping to apply for Public Service Loan Forgiveness, but the tool provides no guidance for applying for TEPSLF. The GAO also recommends that the Education Department streamline the TEPSLF application process and be much more transparent with borrowers about the program’s process and requirements.
“Congress and the American people have a problem when our education department has a serious roadblock in providing monies to educate our children. Remember our nation’s resilience realize on the future motivation in our youth.”