Megan Udinski, FISM News
The U.S. Department of Education (DOE) announced a time-limited waiver for those utilizing the Public Service Loan Forgiveness (PSLF) Program they hope will help approximately 550,000 public service workers get closer to debt relief.
The program was initiated in 2007 and was intended to cancel student loans to government employees and essential non-profit workers such as teachers, military personnel, and firefighters who have given at least 10 years of service in their field.
According to the Government Accountability Office (GOA), however, the program rejects 98% of those who apply. In July, the Biden administration opened a public forum to hear feedback from borrowers on their experiences with the PSLF program and received about 50,000 responses.
According to a fact sheet published by the DOE, the pandemic has played a major role in encouraging a fix to long-term problems with the PSLF program in hopes of aiding frontline sectors who are experiencing employee burnout and shortages. The press release states, “Alleviating some of the financial strain associated with student debt can help borrowers in these sectors as they continue to navigate the fallout of this pandemic.”
The DOE suggests borrowers who meet the criteria to use the Help Tool located on their website by October 31, 2022 as it is a limited-time waiver.
One of the main objectives of the reform is simplify the requirements to ensure that those who are eligible for student loan forgiveness are able to access the money. Previously many who applied were denied due to clerical issues, such as not paying the correct amount on a loan payment or late payments. Under the new guidelines, the DOE will review previously denied applications and correct any errors that are found.
According to the DOE, “This policy will result in 22,000 borrowers who have consolidated loans—including previously ineligible loans—being immediately eligible for $1.74 billion in forgiveness without the need for further action on their part. Another 27,000 borrowers could potentially qualify for an additional $2.82 billion in forgiveness if they certify additional periods of employment.”
Sarah Butts, the Public Policy Director for the National Association of Social Workers applauded the Biden administration for reforming the PSLF programs saying these “changes have potential to transform the lives of social workers across the country, renewing hope and providing significant financial relief from the substantial student debt burden that our workforce carries.”
While many are thrilled by the changes being made, Virginia Foxx (R-N.C.) Republican Leader of the Education and Labor Committee made clear her disapproval of the action stating, “What do the American people get in return for this back door scheme from the Democrats? Taxpayers, a majority of whom don’t have a college degree, get to foot the bill for the Biden administration’s far-left fiat. The price tag will be in the billions; combined with Biden’s inflation crisis and the fact that government always overspends but rarely delivers, taxpayers should expect to be on the hook for much, much more.”
Before Biden took executive actions to amend the PSLF program, Rep. Foxx sent a letter to Secretary Cardona of the DOE urging him to work with Congress to fix the federal loan and repayment program rather than continue to use misleading statistics and executive authority.
In her letter she writes, “We need to be honest about what this really is: an abuse of “executive authority” to override legislated program requirements to appease progressive advocates. In fact, without the permanent pandemic narrative the Biden administration so desperately clings to, you would have no such authority to take this action, as you note in the summary of changes to the PSLF program as a part of the negotiated rulemaking process.”