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Courtney: As CBS News Shines Light on PSLF Troubles for Veterans and Servicemembers, White House Announces Changes Coming Soon

October 4, 2021
Press Release

NORWICH, CT – Today, Congressman Joe Courtney (CT-02) welcomed news from the Biden Administration indicating that long awaited changes to fix the federal Public Service Loan Forgiveness (PSLF) program will soon be revealed. At a press briefing held yesterday, White House Press Secretary Jenn Psaki stated that the Department of Education plans to announce a major overhaul of the program “in the coming weeks.” The statement comes following new reporting by CBS News that shows the extent to which PSLF has left America’s servicemembers behind—of nearly 180,000 active-duty servicemembers with federal student loans, only 124 have received loan forgiveness through PSLF. Click here to read more.

“It’s been good to finally see an Administration that’s serious about righting the ship at PSLF, and ensuring we do right by the thousands of American servicemembers, teachers, nurses, and others who have worked hard, played by the rules, and have really earned this relief,” said Rep. Courtney. “The new reporting out from CBS is almost unconscionable—no one deserves student loan forgiveness more than our uniformed servicemembers, and the rate at which they were being denied over the past four years and previously is unacceptable. I introduced the bipartisan Recognizing Military Service in PSLF Act specifically to support our veterans and servicemembers, and I give Leslie Stahl at CBS a lot of credit for zeroing-in on the issue and giving our servicemembers a platform to speak out. My team and I have been working this issue from every angle—and in bipartisan fashion every step of the way—and we’re looking forward to seeing more details from Secretary Cardona on some long awaited, and much needed changes to PSLF.”

Rep. Courtney is a senior member of the House Education and Labor Committee, and has led the call for years to right the ship at PSLF since a wave of complaints first began surfacing in 2018. This week’s update on forthcoming changes comes following Courtney’s September 24th letter to U.S. Department of Education Secretary Miguel Cardona to weigh in on behalf of five eastern Connecticut residents who have encountered problems with PSLF, and to propose three specific guiding principles to help fix the program: Simplicity, Accessibility, and Communication.

The update also comes following new reporting this week from CBS News highlighting the problems that America’s military servicemembers have encountered with the PSLF program—an issue Rep. Courtney has specifically sought to address through his bipartisan bill, the Recognizing Military Service in PSLF Act (H.R. 3684). In a 60 Minutes news segment, CBS correspondent Leslie Stahl revealed data from an April report by the Government Accountability Office (GAO) which found that of nearly 180,000 active-duty servicemembers with federal student loans, only 124 have managed to successfully apply for an receive discharge through PSLF.

Courtney has worked for years to fix the PSLF program, and this year has focused particularly on servicemembers. In May, Courtney introduced the Recognizing Military Service in PSLF Act. The bill is strongly bipartisan—Courtney was joined by Rep. Dusty Johnson (R-SD) as an original co-sponsor—and would finally enable American servicemembers to count the full length of their service towards student loan forgiveness. Existing rules prevent many active duty servicemembers who have deployed from applying their full period of deployed service towards PSLF, meaning they’re made to complete a longer period of service before qualifying for student loan forgiveness. H.R. 3486 would allow them to count the full length of their service towards PSLF. In September, Courtney’s bill became officially included in the Education & Labor Committee’s portion of the Build Back Better Act.

Courtney’s Recognizing Military Service in PSLF Act has been endorsed by nationwide Veterans Service Organizations including the Iraq and Afghanistan Veterans of America (IAVA), the Student Veterans of America (SVA), Veterans of Foreign Wars (VFW), the Military Order of the Purple Heart, and more.



Rep. Courtney’s Work to Correct the PSLF Program

Congressman Courtney has worked for years on behalf of American student loan borrowers of all ages to lower the cost of higher education, and to hold unscrupulous loan servicers and for-profit colleges accountable.

Courtney has pressed the Department of Education to fix the PSLF program since a wave of complains first began surfacing in 2018. That year, the U.S. Department of Education (ED) released data showing that an outsized 99% of PSLF applicants had been rejected, many through no fault of their own. In April 2018, Rep. Courtney voted to pass the Consolidated Appropriations Act of 2018, which created the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program to assist public servants who had previously been denied forgiveness on their student loans.

Despite ED’s knowledge that PSLF was not being administered properly, in December 2018, former ED Secretary Betsy DeVos and the Trump Administration issued a memorandum barring student loan servicers from releasing important data to law enforcement officials, hindering the ability of states’ Attorneys General and agencies like the Consumer Financial Protection Bureau (CFPB) to maintain oversight of loan servicers who might be engaged in unscrupulous practices. Only a few weeks later, in May 2019, a report from the Office of the Inspector General (OIG) found that 61% of loan servicers were non-compliant with ED standards.

Rep. Courtney questioned former Secretary DeVos on her Department’s efforts to undermine protections for student loan borrowers when she came before the House Education and Labor Committee for a hearing in April 2019. He stated in part: “Brazenly, the Department did not even publicly notice this [memorandum], and it was only obtained because someone at the Department leaked it. So, I want to ask, […] what is the rationale for the Department to shut off that flow of information regarding student loan servicers, which has been standard operating procedure for decades? This is a decision you made—to shut off this information to people who are law enforcement. They’re investigating things like fraud. So please explain the decision in that memo.” Click here to read more.

On August 11th, Secretary Cardona announced that his Department would restore the government’s ability to conduct oversight of loan servicers on behalf of borrowers within their jurisdictions—the oversight that Secretary DeVos did away with.

On August 24th, the Biden Administration also announced a policy under which they’ll presumptively grant full student loan relief to borrowers the Department determines were defrauded by their colleges—a departure from the previous administration’s policy. Under former Secretary DeVos, students who could prove they were defrauded were only ever entitled to receive partial relief. Instead, the Department of Education under Secretary Cardona will assume that defrauded student borrowers are entitled to 100% relief, unless evidence is presented to the contrary.

On September 24th, Courtney wrote to U.S. Department of Education Secretary Miguel Cardona to weigh in on behalf of eastern Connecticut residents who have encountered serious problems with PSLF. Courtney shared the stories of five eastern Connecticut residents who encountered problems with PSLF, and encouraged the Department to adhere to three guiding principles in correcting the program: Simplicity, Accessibility, and Communication. Click here to read more.

 

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