ED Solicits Public Comments on PSLF Experiences

By Hugh T. Ferguson, NASFAA Staff Reporter 

The Department of Education (ED) is requesting public comments that will aim to identify and resolve challenges with the implementation of the Public Service Loan Forgiveness (PSLF) program. 

The request follows the department’s recent announcement of PSLF as a possible topic for upcoming negotiated rulemaking sessions and public hearings in which long-term issues centered around the PSLF program were a part of daily commentary. 

“The Office of the Under Secretary solicits these comments to identify operational improvements to the PSLF program and to inform determinations about technical improvements, borrower experiences, policy considerations, or other factors that should be considered to improve access to PSLF,” said Julie Margetta Morgan, ED’s senior advisor and acting under secretary.

Reforming PSLF has been an issue of primary concern with several public service workers having detailed their own cumbersome experiences seeking forgiveness through PSLF, often ending unsuccessfully, which has been the case for a vast majority of borrowers throughout the program’s existence.

“While the basic structure of the PSLF program is statutory and therefore must be addressed by Congress, we are encouraged to see that ED intends to use the regulatory process to implement operational improvements to improve the borrower experience and expand access to this critical borrower benefit,” said Karen McCarthy, NASFAA’s director of policy analysis.

In its latest request for comments, ED is encouraging comments from individual students and student loan borrowers specifically calling for input from: 

— Organizations representing students and student loan borrowers. 

— Labor unions and other organizations representing public service workers. 

— Legal services providers and other organizations that provide counseling or direct assistance to student loan borrowers. 

— Public service employers. 

— Researchers and policy experts. 

— Student loan market participants. 

— Institutions of higher education. 

— Other members of the public.

“We have more work to do if we want the PSLF Program to live up to its promise,” Morgan said. 

Comments must be submitted to ED by Sept. 24.


Publication Date: 7/26/2021

Lesley B | 7/26/2021 5:15:21 PM

Restructuring the federal direct student loan program so loans carry the same interest every year, without origination fees, and no capitalization of interest would create an improved system. We should help our society increase its educational value through compassionate lending that prevents, as much as possible, the government or any of its representatives from profiting off the backs of students. PSLF can be better than a ten-year promise to give back to society with the additional disclaimer that one should be prepared to follow a convoluted process that may, or probably will not, come to fruition forgiveness for the borrower. Like the Peace Corps, public service should be something to be proud to have done, not a long-term commitment (5 years of proven public service - use the FSA ID with employer), and a proven addition to the greater good. How did this get so complicated? How did this become so humiliating for the borrower? Powerful individuals and entities profit from it being complicated, and student borrowers lose, and so does our country.

David S | 7/26/2021 5:6:55 PM

“We have more work to do if we want the PSLF Program to live up to its promise" is in the running for Financial Aid Understatement of the Year.

I got a robocall today while on a Zoom call from a helpful organization informing me in a nice robot voice that the government is no longer accepting applications for loan forgiveness and encouraging me to press 1 for information on how I can put my loan in forbearance. Since I was already on a call I didn't bother playing along, but sometimes I do. I have an uninterrupted record...every time I listen and then tell whoever I'm talking to what I do for a living, they hang up.

But...I know that ED has cracked down on some of these scams, but they haven't completely disappeared. Easy for people like us to spot (and side note, my student loans were paid off decades ago), but no doubt many borrowers fall for it.

Roselyne D | 7/26/2021 4:28:20 PM

I finally qualified due to many years service with my state serving in financial aid only to find out that my loan should have been paid off in 10years. I don't know how unless I went without eating - there should not be so many hurdles and it should not appear that the DOE is unwilling to comply with this benefit

Shawn B | 7/26/2021 1:35:57 PM

Support borrowers that were mislead and lied to by their servicer and deprived of assistance from DOE. There is enough blame to go around as the rollout of the program was not well implemented. With that said, borrowers should not have to pay for the inability of the servicers and DOE to implement a program.
Borrowers were told – you are in PSLFP, your payment plans were changed to match PSLFP, and to contact the servicer when the borrower was near the end of our 120 payments to submit employer documentation that qualifies us for public service. When borrowers asked what do we needed to do, the Servicers replied, "Nothing; You are in PSLFP. You can submit your paperwork after your 120 payments."
Now borrowers owe more than they ever borrowed while paying on their loans for more than 20+ years. PSLFP has gone from poor implementation to mistake to lie to scam. All student loan borrowers should be included, even if DOE refused to deny borrowers because they were never in PSLFP due to the servicer. Borrowers should be able to receive their years of public service no matter if they were placed in the PSLFP or not, no matter what type of Federal Loans they have or had.
Borrowers have made personal and family decisions, including taking jobs that paid less to remain a public servant so they could participate in the PSLFP. (Most love being a public servant, but families could have had more financial security if they had left for a private job.) This scam has damaged student loan borrower families' economic well-being, emotional state, and spirit.
Problem – Student loans are a for-profit industry that has been overtaken by greed while students and their families lose economic well-being.
Solution – If in public service and paid 120 payments, then loans are forgiven. Not in public service - if you have paid 180 payments, then loans are forgiven.

Billy B | 7/26/2021 1:8:57 PM

I finally qualified for forgiveness but I had to appeal 3 times and watch them because 1 time they closed my appeal without telling me and the second appeal they claimed 83 payments weren't eligible due to late payments (due to an issue with a 1 month forebearance. I was also listed as on time each moth and was able to document. I suspect someone not working in financial aid would have given up at some point. It took almost 3 years to assess my payments weren't counting correctly and appeal 3 times to get them counted. Only after the 2nd appeal did they even give me a reason my payments didn't count. I shudder to think about the people that just gave up.

Rebecca A | 7/26/2021 11:44:03 AM

I agree with the sentiment of others posting about the interest. Not capitalizing the interest as this makes the loans grow much larger creating challenges to pay down debt.

Eileen E | 7/26/2021 10:17:58 AM

I agree with Carly about the interest. There is no way for a student to refinance their Federal student loan debt without losing their Federal benefits. When loan consolidation change in 2006, the weighted average interest rate has not worked. If you took out a few loans back in 2008-2012, you want a lower interest rate. There is no way to do this with a weighted average. Your interest rate does not change. Currently, the student loan interest rate is at its lowest in few years. A Federal loan borrower is not able to take advantage of it. I would prefer that government cancel the interest rate on any Direct loan issue as of 07/01/2006 and forgive loan debt of $10k or less. I believe this could make both sides of our government happy. What is the government benefiting from the interest rate on a student loan for our society? We will be paying for it late. When these loan borrowers are over the age of 65 years old. These borrowers are not saving for retirement because of the loans.

Cathy B | 7/26/2021 9:19:07 AM

I would encourage the DOE to consider putting a cap on how much interest a loan can gain (no more than 20% above the total amount of the loan) so the student is able to pay off the principal of the loan easier. In addition, not capitalizing the interest and keeping it separate from the loan would also be helpful. Otherwise the student is paying interest on the interest on the interest when it becomes part of the loan. It is the interest and the interest capitalization that makes the loans grow like a monster. If a student is not able to obtain a well paying job and needs to put their loans in forebearance, it does nothing to help the student as the loan continues to grow and capitalize putting the student further and further in debt. Additionally, many students will take a break from working if they have a child. It may not be realistic to be able to pay a loan amount at that time. Even using Income Based Repayment, does nothing to reduce the amount of the loan, but actually increases the amount of the loan because the payment on the loan is most likely much less than the interest the loan is accruing. Then, this is capitalized at the end of the year, making the loan grow and grow with paying off the loan becoming more and more unattainable. Student loans should not be able to double in size. These loans were created to help the student afford school, but the economic challenges do not see the income levels meeting the same amounts as the interest on loans. Something must be done to reduce the interest. Students made a promise to pay the loan. They should repay the loan, but the interest is out of hand and needs to be managed better.

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