SACRAMENTO – California Attorney General Xavier Becerra today urged the U.S. Department of Education (ED) to provide promised relief for public servants who apply for student loan forgiveness under the Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs. While many of the programs' applicants have completed the public service and payment requirements necessary to qualify for forgiveness of the balance on their federal student loans, nearly all of them have had their applications denied. In the comment letter, Attorney General Becerra urges ED to take immediate and decisive action to improve administration of the PSLF and TEPSLF programs and to expand its efforts to simplify the application process. The letter expresses support for ED’s commonsense proposal to consolidate the application forms for the programs but argues that this administrative fix does not go far enough.
“The PSLF program was intended to support public servants, enabling forgiveness of student loans for those who chose to give back to their communities through public service,” said Attorney General Becerra. “For ten years, countless college graduates took on this call to duty. They structured their lives and jobs around the promise that their student loans would be forgiven. They often made substantial career and financial sacrifices. Then, when they had completed their service, they were senselessly denied the relief they had earned. While the proposal to consolidate PSLF and TEPSLF applications is a useful step in the right direction, I urge the Department of Education to do far more to improve the administration of these programs and ensure that our public servants get the loan forgiveness that they were promised and they deserve.”
Congress created the PSLF program in 2007 to incentivize students to enter public service in return for loan forgiveness after ten years of on-time loan payments. But when the first wave of 10-year PSLF participants had accomplished their service in 2017, only 96 out of 28,000 received loan forgiveness – a 99.6% denial rate. In response, Congress created the TEPSLF program and gave ED clear instruction to simplify and expand the program in order to increase the rate of loan forgiveness. Despite this, ED has denied TEPSLF applicants at nearly the same rate as PSLF applicants. Many Californians rely on public service loan forgiveness to support themselves and their families. They pass up more lucrative jobs and structure important life decisions around the promise that their sacrifice and hard work will pay off. Being denied relief after a decade of service and assurances that you are on track can be devastating.
In the comment letter, Attorney General Becerra expresses his support for ED’s decision to streamline the application process through the creation of a single application form. But he argues that the proposal does little to fix ED’s massive implementation failures in administering the programs. Given both the PSLF and TEPSLF programs' alarming denial rate, Attorney General Becerra urges ED to take decisive action to increase outreach and provide clear and consistent information to student borrowers about the programs. ED must correct its ongoing mismanagement of the programs and follow Congress' instruction to improve the rate of loan forgiveness or risk scaring off critical public servants who we all rely on to protect our health, welfare, and safety. Like many other public service employers, the California Department of Justice has utilized the PSLF and TEPSLF to recruit and retain its workforce.
Attorney General Becerra has been a leader when it comes to holding the Department of Education and its Secretary, Betsy DeVos, accountable. In October 2018, and again in August 2019, Attorney General Becerra called on Secretary DeVos and Federal Student Aid Acting Chief Operating Officer Jim Manning to address the 99 percent denial rate for Public Service Loan Forgiveness applications. In October 2017, Attorney General Becerra joined a coalition of 18 attorneys general in filing a lawsuit against ED for illegally delaying the implementation of the Obama-era Gainful Employment Rule. Attorney General Becerra then criticized the Trump Administration’s revised version of the Gainful Employment Rule when it was first proposed in August 2018, and submitted a comment letter to ED denouncing the proposal. Furthermore, in March 2020, Attorney General Becerra filed a lawsuit against ED over its action to repeal student loan borrower protections under the Gainful Employment Rule. In December 2017, Attorney General Becerra sued Secretary DeVos over ED’s failure to expeditiously grant promised, full loan relief to tens of thousands of borrowers with pending “borrower defense” claims who were defrauded by predatory for-profit Corinthian Colleges. In May 2019, Attorney General Becerra sent a letter urging ED to discharge the student loans of tens of thousands of veterans who were disabled as part of their service, by developing an automatic discharge program. In June 2018, Attorney General Becerra filed a lawsuit against Navient and its subsidiaries for unlawfully misleading student loan borrowers, engaging in illegal collections practices, and steering borrowers to more costly repayment options. In 2017, Attorney General Becerra sued Ashford University, and its parent company, Bridgepoint Education, for illegal marketing and collections activity, among other abuses; that lawsuit is pending in Alameda County Superior Court.
A copy of the comment letter can be found here.