Courtney Welcomes Biden Administration’s Overhaul of PSLF Program, Includes Changes Courtney Called For to Make Program Simpler and More Accessible
NORWICH, CT – Congressman Joe Courtney (CT-02), a senior member of the House Education and Labor Committee, issued the following statement today after the U.S. Department of Education (ED) announced an overhaul of the federal Public Service Loan Forgiveness Program (PSLF). The changes announced today are estimated to impact more than 550,000 American student loan borrowers, and include provisions for active-duty servicemembers that Rep. Courtney has specifically worked to advance.
ED’s announced overhaul of PSLF will be implemented over the next year, and will remedy problems that have prevented eligible borrowers from taking advantage of the promise of PSLF. The changes will also ensure that the program is doing right by America’s active duty servicemembers and veterans—an issue Rep. Courtney has specifically worked to correct. The overhaul includes provisions contained in Rep. Courtney’s Recognizing Military Service in PSLF Act (H.R. 3684) that will allow active-duty service members to count months spent on active duty toward PSLF, even if the servicemember’s loans were on a deferment or forbearance rather than in active repayment, and will automatically provide credit towards PSLF for military servicemembers. Rep. Courtney introduced the Recognizing Military Service in PSLF Act in May with strong support from both sides of the aisle, and from veterans’ service organizations like the IAVA, the VFW, and many more.
“President Biden and Secretary Cardona have officially put the Department of Education back on the side of American students, workers, and student loan borrowers of all ages—if it wasn’t clear before, it should be now,” said Congressman Courtney. “PSLF was established to reward Americans who entered into careers that our communities depend on—teachers, nurses, fire fighters, police officers, and others. My office has heard from teachers, social workers, and servicemembers who worked hard, played by the rules, but were denied the relief through PSLF they rightfully earned, and we’ve been pressing on their behalf to make the program more transparent, simple, and fair. These changes are a big step in the right direction—from doing away with notoriously confusing application requirements, to finally giving borrowers the right to have their denied applications reviewed for errors, to automatically applying earned credit towards PSLF for thousands of Americans.”
Rep. Courtney continued: “The Biden Administration’s overhaul of PSLF also includes an effort supported by service members and vets in eastern Connecticut and across the U.S.—one we worked to advance this year through the Recognizing Military Service in PSLF Act. For the 10,000 active-duty servicemembers who are deployed overseas at any given time while placing their student loans in military service deferment, these new changes mean that their full period of deployment will now be counted towards their student loan forgiveness. Just this week, 60 Minutes reported that only 350 members of the armed services have been able to take advantage of PSLF so far—a minute fraction compared the 180,000 who are eligible. Our public service workers entered into an agreement where they were promised these benefits, and no one deserves it more than our uniformed, active-duty servicemembers deployed far away from home. This is a correction we’ve worked hard to bring about, and it couldn’t have happened without the strong, consistent support of servicemembers and veterans in Connecticut and across the country.”
Rep. Courtney has worked for years on behalf of student loan borrowers of all ages to right the ship at PSLF. Most recently, he weighed in with Secretary Cardona on behalf of eastern Connecticut residents who had experienced problems with the program, and to propose specific fixes. Today’s announcement from ED includes provisions contained in bipartisan legislation Rep. Courtney has introduced, and incorporates the guiding principles of simplicity, accessibility, and communication that Rep. Courtney insisted are necessary. The changes to PSLF announced by ED include:
- Allowing active-duty servicemembers to count the full length of deployment towards loan forgiveness—Servicemembers are currently eligible for PSLF. They also have access to student loan deferment and forbearance periods during deployments. These are intended to account for the unique financial impacts of deployment on a servicemember’s family, but currently those periods do not count as PSLF qualifying payments—a servicemember who puts their loans into deferment or forbearance during a deployment currently needs to complete a longer overall period of service before qualifying for student loan forgiveness. Today’s change will allow active-duty servicemembers to count deferments and forbearances towards PSLF—accomplishing the goal of Rep. Courtney’s Recognizing Military Service in PSLF Act (H.R. 3684).
- Automatically providing credit toward PSLF for military servicemembers and federal employees using federal data matches—Over the next year, the Department will implement data matches to give these borrowers credit toward PSLF without an application. The Department estimates this will result in 22,000 borrowers who have consolidated loans—including previously ineligible loans—being immediately eligible for student loan forgiveness without need for further action on their part.
- A limited PSLF waiver that allows all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan—This waiver will allow student borrowers to count all payments made on loans from the Federal Family Education Loan (FFEL) Program or Perkins Loan Program. It will also waive restrictions on the type of repayment plan and the requirement that payments be made in the full amount and on-time for all borrowers. To receive these benefits, borrowers will have to submit a PSLF form by October 31, 2022, which is a single application used to certify employment and evaluate a borrower for forgiveness.
- Reviewing denied PSLF applications for errors and giving borrowers the ability to have their PSLF determinations reconsidered—These actions will help identify and address servicing errors or other issues that have prevented borrowers from getting the PSLF credit they deserve
- The Department estimates that 22,000 borrowers who have consolidated loans—including previously ineligible loans—being immediately eligible for loan forgiveness without the need for further action on their part. Another 27,000 borrowers could potentially qualify for loan forgiveness if they certify additional periods of employment. Many more will also see progress as borrowers consolidate into the Direct Loan program and apply for PSLF, and as the Department rolls out other changes in the weeks and months ahead.
Click here to read ED’s full announcement.
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 May 25th, Courtney introduced the Recognizing Military Service in PSLF Act (H.R. 3684). 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. Courtney’s bill received support from veterans’ service organizations like the IAVA, the VFW, and many more. In September, Courtney’s bill became officially included in the Education & Labor Committee’s portion of the Build Back Better Act.
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.