S. Department of Education would forgive whatever remained of their federal student loans
According to the GAO’s yearlong review of the program, 71% of all TEPSLF denials were rejected because of this one hurdle – asking borrowers to first apply for a program they know they do not qualify for. That’s 38,068 requests denied. It is unclear how many of those borrowers, once they are denied PSLF, would technically qualify for TEPSLF.
“This can be confusing to borrowers,” the GAO’s Emrey-Arras tells NPR. “It doesn’t make a lot of sense, from a borrower perspective, as to why you would need to apply for a program that you know you’re ineligible for. Yet that’s the way the process works.”
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 servicer 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.”
In return for 10 years of government or not-for-profit work and 120 qualified student loan payments, borrowers were told the U. 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 payday loans in CT 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.
In fact, knowing that borrowers were already feeling frustrated and disillusioned with PSLF, lawmakers directed the Department of Education to do the opposite, to make this expansion easy to access: “The Secretary shall develop and make available a simple method for borrowers to apply for loan cancellation
“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.