04.07.17

Leahy, Sanders And Other Democratic Senators Demand Fair and Consistent Treatment of Student Loan Borrowers in Public Service

Sen. Patrick Leahy and Sen. Bernie Sanders (I-Vt.) joined a letter to Secretary of Education Betsy DeVos led by Sens. Claire McCaskill (D-Mo.), Kirsten Gillibrand (D-NY), Bill Nelson (D-Fla.), and Patty Murray (D-Wash.), and sent by a total of 36 senators. The letter expresses concern over announcements that borrowers may not be able to rely on notices they have previously received about their eligibility for Public Service Loan Forgiveness (PSLF).

Leahy said:  “The Public Service Loan Forgiveness program was a bipartisan law, signed into law by President Bush.  It was created to give graduates incentives to seek meaningful work in the public interest.  Student loan borrowers who decide on careers in public service should not be given confusing or conflicting information on whether or not they qualify for the loan forgiveness program.  We are calling on the Department of Education to act swiftly in response to our letter, and to address the real and timely concerns that we have heard from borrowers in Vermont about the consistency and accessibility of this program.”

Sanders, who serves on the Senate Health, Education, Labor and Pensions (HELP) Committee, said: “At a time when most students graduate college with more than $30,000 in debt, and those with advanced degrees can have $100,000 or more in debt, we should be providing workers in public service clarity -- not confusion -- about the loan forgiveness they are entitled to. If the Education Department told a borrower in error that they were eligible for forgiveness, that borrower should be grandfathered in. They should not have the rug pulled out from under them.  This is just one more example of why we need to radically rethink how we pay for higher education. It makes no sense to burden young adults entering the workforce with unsustainable mountains of debt.”

The letter was sent April 6 to Secretary DeVos.  “Our nation’s student loan borrowers who uphold their commitments expect the federal government to do the same.  Members of our military, first responders, teachers, social workers, public defenders, and many other honorable public servants across the country are dedicating 10 or more years of their lives to help their communities in return for the basic promise of relief on their student loan debt,” wrote the senators.

“It is unacceptable for the Department to have told students they may rely on PSLF to help pay their student loans, only to have that assurance suddenly revoked,” the letter continued. “Borrowers who have been told in error that their employers qualify for PSLF should at a minimum be grandfathered-in for the period they were previously approved, even if the Department intends to change its determination about qualifying employment going forward.”

Following recent reporting by the New York Times and others about the uncertainty created by the Department’s latest court filings, many student loan borrowers were concerned and confused about their future financial obligations even while they work to serve their country or community in positions of public service. As of December 2016, more than 550,000 borrowers have submitted at least one approved form to certify their employment. However, roughly a third of all submitted employment certification forms have been denied.

The letter requests Secretary DeVos further streamline the application process and make it more transparent to reduce the confusion and inconsistency for PSLF borrowers, such as issuing clear guidance about eligible organizations. The letter also calls for improving the notices sent to PSLF applicants, including clear instructions on how to appeal decisions about a borrower’s eligibility.

In addition to Sens. Leahy, Sanders, McCaskill, Gillibrand, Nelson, and Murray, the letter was signed Sens. Schumer (D-NY), Feinstein (D-CA), Wyden (D-OR), Durbin (D-IL), Reed (D-RI), Cantwell (D-WA), Menendez (D-NJ), Cardin (D-MD), Casey (D-PA), Klobuchar (D-MN), Whitehouse (D-RI), Shaheen (D-NH), Bennet (D-CO), Franken (D-MN), Coons (D-DE), Blumenthal (D-CT), Baldwin (D-WI), Donnelly (D-IN), Hirono (D-HI), King (I-ME), Kaine (D-VA), Warren (D-MA), Heitkamp (D-ND), Markey (D-MA), Booker (D-NJ), Van Hollen (D-MD), Hassan (D-NH), Warner (D-VA), and Carper (D-DE).

The text of the full letter is below.

April 6, 2017

Dear Secretary DeVos:

We write with great concern over the U.S. Department of Education’s (“Department”) lack of consistent, transparent, and fair treatment of student loan borrowers participating in the Public Service Loan Forgiveness (“PSLF”) program.

Our nation’s student loan borrowers who uphold their commitments expect the federal government to do the same. Members of our military, first responders, teachers, social workers, public defenders, and many other honorable public servants across the country are dedicating 10 or more years of their lives to help their communities in return for the basic promise of relief on their student loan debt. Many of these individuals have decided to borrow for their education explicitly because the option to receive relief on their debt allows them to afford the lower pay and benefits that are associated with the public sector, and in our rural, tribal, and other under-resourced communities.

Recently, the Department has suggested that some individuals may not be able to rely on the prior notices and advice they have received from the agency and its designated contractor. It is unacceptable for the Department to have told students they may rely on PSLF to help pay their student loans, only to have that assurance suddenly revoked. Borrowers who have been told in error that their employers qualify for PSLF should at a minimum be grandfathered-in for the period they were previously approved, even if the Department intends to change its determination about qualifying employment going forward.

Additionally, the Department has created a great deal of confusion for applicants who are employed by non-profit organizations that provide certain types of public service, but are not categorized under Section 501(c)(3) of the Internal Revenue Code. To clarify this confusion, we request that the Department further define and formally clarify the types of eligible employers that qualify for PSLF. These include, but are not limited to, organizations working in the areas of emergency management, military service, public safety, law enforcement, public interest law services, early childhood education, service for individuals with disabilities and the elderly, public health, public education, and school-based services.

This guidance should be publicly accessible in a prominent location and include real-world examples of organizations that qualify in each of these fields. And, when the Department receives requests to approve new employers it has not previously considered, these borrowers should receive a timely response.

PSLF borrowers also deserve the highest standards of customer service when making progress toward their debt relief. There are several steps that should be taken to improve the user experience with PSLF. When the Department or its designated contractor issues denials of employment certification to borrowers, these communications should give borrowers clarity and support. Denials should state the specific reasons that an employer or form has been denied, clearly list the options and process for a borrower to appeal the decision, and specifically inform the borrower that they may work with their employer to provide documentation to support a conclusion that their employment qualifies.

Finally, the Department should act swiftly to fully digitize the PSLF employment certification and application process, including allowing borrowers and employers to digitally sign their forms. The Government Paperwork Elimination Act, signed nearly two decades ago, called for federal agencies to increase their use of electronic forms, electronic filing, and electronic signatures to conduct official business with the public. Although it is positive that borrowers can digitally upload many forms and documents on the web with their servicers, PSLF forms have limited functionality.

Currently, all borrowers must print the employment certification form, manually sign it, and also have it manually signed by their employer. Furthermore, online submission of a scanned form is only an option for borrowers who have existing accounts with the Department’s designated contractor. Borrowers with other student loan servicers should not be required to mail or fax their forms. In an era where fax usage and availability has declined significantly, borrowers should not be asked to fax information to loan servicers when modern technology is readily available to solve these problems.

These steps would provide PSLF applicants with additional certainty and transparency as they work to meet their obligations. Given that borrowers may first become eligible for full forgiveness of their remaining balances through PSLF on September 2, 2017 of this year—less than six months away—we request your response to the policies and reforms to the Department’s implementation of the PSLF program as expeditiously as possible and no later than April 27, 2017. Thank you for your attention to this matter.

Press Contact

David Carle: 202-224-3693