The Education Dept. Has Turned Down 99% of Applicants for the Public Service Loan Forgiveness Program. California and Illinois Want Answers.

California’s attorney general has requested information from the U.S. Department of Education after learning that 99% of applicants for the Public Service Loan Forgiveness Program have been denied.

Xavier Becerra sent a second letter regarding the program Wednesday along with the attorney general of Illinois. Here is an excerpt:

Even incomplete and overdue, the data is extremely troubling. Only 864 of 76,002 applications for PSLF have been approved, a rate barely over 1 percent. The March 2019 data also show that only 442 of 12,429 applications to the Temporary Expanded PSLF program have been approved, a rate of 3.6 percent. Tens of thousands of borrowers continue to be frustrated when they attempt to avail themselves of PSLF or the temporary expansion that Congress enacted last year. Without PSLF, many of these individuals will suffer economic hardship and may have to choose between public service careers and being able to repay their student loans. Nonprofits, schools, and departments like yours and ours will find it even more difficult to attract top talent if borrowers decide that PSLF is impossible to achieve, even if they do everything right.

To assist these borrowers, we repeat our request for better data from the U.S. Department of Education to allow our offices to examine the scope and source of the problems. The March 2019 data you shared is not fully responsive to our offices’ requests. The data was also public for over three months before you responded to our letter. Indeed, it seems that the Department has made no effort to independently respond to our information requests. This is unacceptable in the face of the astronomical denial rates in the PSLF program.

The information that we are requesting is necessary to diagnose the source of the denials and to take concrete action to help borrowers. For example, you acknowledge in your response that borrowers with Federal Family Education Loans (FFEL) loans were unaware of the need to consolidate into Direct loans. You fail, however, to respond to our questions about the total number of payments made on the non-qualifying loans, the total dollar amount of payments made on the non-qualifying loans, or who was servicing the non-qualifying loans. Similarly, you acknowledge that 53 percent of rejections, nearly 40,000 applications, were based on a lack of qualifying payments. Yet you fail to provide the requested details on why the payments were not considered qualifying payments and who was servicing the loans that lacked qualifying payments.

“Hundreds of thousands of Americans relied on this promise to make life plans and career decisions. They will be left in financial turmoil if the Trump Administration reneges on the promised loan forgiveness” Becerra said in a press release.

Read more about the issues affecting the Public Service Loan Forgiveness Program at the Sacramento Bee