July 30, 2014 -- A new report authored by a broad cross section of the nation’s financial aid administrators makes key recommendations for continuing and improving the Public Service Loan Forgiveness program.
The Public Service Loan Forgiveness (PSLF) program, established in 2007, encourages student borrowers to work in the public sector. Qualifying borrowers may have their Direct Loans forgiven after 10 years of full-time service in an eligible job. Currently, qualifying employers include federal, state, or local government agencies and tax-exempt 501(c)(3) not-for-profit organizations.
In spring 2014, the Board of Directors of the National Association of Student Financial Aid Administrators (NASFAA) convened a PSLF Task Force to develop recommendations for improvement and to strengthen PSLF’s potential for long-term viability. The task force comprised a geographically diverse group of financial aid professionals from all types of postsecondary institutions, with a particular emphasis on institutions serving graduate and professional students.
“PSLF offers an important incentive for borrowers to enter into lower-paying public service work,” said NASFAA President Justin Draeger. “However, in recent years policymakers have expressed concern about the potential for some borrowers to receive loan forgiveness despite earning a substantial income. It is vital to the program’s long-term sustainability that we take steps to ensure the integrity of the program.”
“NASFAA’s PSLF Task Force was asked to examine the intent and benefits of the program and related consumer disclosures, identify needed data elements to more accurately assess its success, and consider modifications and improvements,” said Task Force Chair Candi Frazier.
In June the NASFAA Board accepted and endorsed the recommendations provided by the task force that are detailed in this report:
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The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the U.S. Based in Washington, DC, NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit www.nasfaa.org.