Sending Office: Honorable Katie Porter
Sent By:
Kaylee.Niemasik@mail.house.gov

Congresswoman Porter invites Members to join a letter to Secretary DeVos, expressing concern about the findings articulated in the Government Accountability Office (GAO)’s
September 5th report: “Public Service Loan Forgiveness: Improving the Temporary Expanded Process Could Help Reduce Borrower Confusion.” The Report finds severe flaws with the Department’s administration
of TEPSLF. TEPSLF eliminates (or “forgives”) the remaining balance on a direct loan after a borrower has made 120 on-time, complete payments toward a qualifying repayment plan while working full-time in public service for ten years. 

The letter requests information about the Department’s plans to implement the GAO’s recommendations. Americans for Financial Reform, Student Borrower Protection Center, and Student Debt Crisis are all supportive.

Current cosigners: Sarbanes, Engel, Lofgren, Connolly, Bustos, Susan Davis, Eshoo, DeFazio, Wexton, Spanberger, and Shalala 

Please email kaylee.niemasik@mail.house.gov or jessica.seigel@mail.house.gov if you’d like to add your boss or with any questions.

 

Dear Secretary DeVos,

We are deeply concerned by the findings articulated in the Government Accountability Office (GAO)’s September 5th report: “Public Service Loan Forgiveness: Improving the Temporary Expanded Process Could Help Reduce Borrower Confusion”
(the Report). The Report was requested to help ensure the U.S. Department of Education (the Department)’s good-faith administration of the Temporary Expanded Public Service Loan Forgiveness (TEPSLF). The Report finds severe flaws with the Department’s administration
of TEPSLF. Borrowers are suffering unnecessary hostility and pointless paperwork burdens. Our nation’s public service employees, including teachers, first responders, and members of our military, should be provided with the debt relief they were promised.
Unfortunately, failures by your Department threaten the financial stability of eligible borrowers, contradict your own stated goals for managing the federal student loan program, and undermine Congressional efforts to provide student loan relief.

The Public Service Loan Forgiveness (PSLF) program was created under the College Cost Reduction and Access Act of 2007 to encourage students to pursue careers in the public sector. PSLF eliminates (or “forgives”) the remaining balance on a direct loan after
a borrower has made 120 on-time, complete payments toward a qualifying repayment plan while working full-time in public service for ten years. In 2017, a decade after the program was created, the Department began accepting the first applications for loan forgiveness
under PSLF as borrowers completed their service requirement.

The implementation of PSLF, however, has been disastrous. In March of this year, the Department released data about PSLF applications which revealed that only 864 of the 72,002 applications processed by March 2019 had been approved for loan forgiveness.
In other words, over 99 percent of borrowers were denied loan forgiveness in the first wave of applications for PSLF.[1] In response to a significant number of denials based on ineligible
repayment plans, often due to misinformation provided by loan servicers, Congress created TEPSLF and made $700 million available for borrowers.[2]

TEPSLF gives borrowers a second chance to qualify for loan forgiveness—issued on a first come, first served basis—if some or all payments they made on direct loans were on a graduated or extended repayment plan[3]
or made in an amount that did not qualify for PSLF, but the borrower otherwise met the conditions for PSLF.[4] However, the GAO has now revealed that both PSLF and TEPSLF have a 99 percent
denial rate. The Trump Administration’s inconsistent and overly complex process for implementing these loan forgiveness programs, in combination with a severe lack of accountability for student loan servicers and debt collectors and efforts to undermine accountability
from state and federal enforcement agencies,[5] created a disaster which completely subverts Congressional intent.

In the Consolidated Appropriations Act of 2018, Congress required the Department to create a “simple method” for borrowers to apply for TEPSLF.[6] The accompanying Committee Report also stated that Congress “notes
that there has been significant concern from borrowers over the Department’s consistency and reliability in administering the Public Service Loan Forgiveness [PSLF] program.” The Department has failed to comply with either directive. The complete language
in the Committee Report makes Congressional intent in creating the TEPSLF program abundantly clear.

         Public Service Loan Forgiveness Program.–The Committee

         notes that there has been significant concern from borrowers

         over the Department’s consistency and reliability in

         administering the Public Service Loan Forgiveness [PSLF]

         program. The Committee encourages the Department, in

         coordination with its Federal loan servicers, to update

         guidance, information, and processes regarding borrower

         eligibility for PSLF. Further, the Committee encourages the

         Department to provide further clarity regarding employer

         eligibility under the program, particularly for applicants

         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. This information should

         be publicly accessible and include real-world examples of

         organizations that qualify in certain fields.

        

         The Committee also notes that there has been concern with

         the level of service provided to borrowers that intend to seek

         PSLF. The Committee encourages the Department to provide to

         borrowers more regular and current information about the status

         of processing their PSLF employment certification, the number

         of qualifying payments made, and the projected date of their

         forgiveness. Further, the Committee encourages the Department

         to expand the use of digital technology in the PSLF program, to

         allow for employment certifications and PSLF applications to be

         completed electronically, and with each student loan servicer.

         Finally, to ensure consistency for applicants, the Committee

         encourages the Department to revisit decisions to rescind

         employment certification for borrowers who were previously

         approved.

 

Despite this plain statement of Congressional intent, the Department has made the TEPSLF application process needlessly difficult to navigate. GAO found that the Department’s unnecessary requirement that a TEPSLF applicant first apply to be rejected, before
applying again, has resulted in 71 percent of program denials issued by the Department.[7] More than a year ago, Members of Congress called for the Department to remove this unnecessary hurdle and to consider a
unified application process.[8] Unfortunately, the Department refused. As a result of these barriers your Department has created to debt relief, to date, you have spent only $27 million of the $700 million appropriated
by Congress for TEPSLF.[9]

Congress also foresaw the challenges of providing outreach to borrowers who might be eligible for the new forgiveness fund or confused about their options for relief, so we set aside $4.6 million for the Department to conduct outreach on both PSLF and TEPSLF.
Again, the Department has failed to comply with Congressional intent. The Consolidated Appropriations Act of 2018 required the Secretary to “communicate to all Direct Loan borrowers the full requirements of section 455(m) of such Act,” but it has refused to
provide a timeline of when this communication to all borrowers will occur and instead suggested “targeted” emails with no clear timeline.[10]

In its Report, the GAO compiled an exhaustive list of the ways in which the Department is failing to carry out its responsibility to administer TEPSLF and PSLF. These failures include:

  1. requiring that borrowers who qualify for TEPSLF but not PSLF still complete the PSLF application (to capture information servicers need to determine program eligibility) but not explicitly informing applicants of this requirement,

 

  1. removing borrowers from the TEPSLF program wait list if they had not first submitted a PSLF application, with zero accompanying feedback or indication as to whether the borrower would in fact qualify,

 

  1. obscuring information about recourse options for borrowers who believe they were improperly denied loan forgiveness,

 

  1. neglecting to provide loan servicers with a consistent and complete accounting of borrowers’ loan payment history information from other loan servicers and thus increasing the risk of a servicer inaccurately counting a borrower’s historic payments
    (and which, according to the Report, occurred with startling frequency),[11] and

 

  1. performing inconsistent and wholly insufficient outreach, including but not limited to: not requiring all servicers of TEPSLF-eligible loans to include information about the program on their websites, not including TEPSLF information within the
    Department’s PSLF Online Help Tool, not creating a similar tool for TEPSLF, and choosing not to include a simple “TEPSLF” check box on the PSLF application, so borrowers understand the dual functions of the application.

 

The GAO made four recommendations to the Department that,[12] if implemented in good faith, would help borrowers obtain the relief Congress intended. Given that the Department largely
accepted the GAO’s recommendations, please provide specific month and year targets for completing these improvements, including accompanying rationales for selecting those dates. Additionally, please describe the remedial measures the Department will take
if these deadlines are not met and how it will hold itself accountable for completing them on time.

It is important that the Department simplify the process and remove the unnecessary and self-imposed administrative burdens that currently prevent borrowers from receiving the relief they are owed under TEPSLF. It was never Congress’s intent to make these
programs functionally inaccessible, which the Department has ensured by erecting a series of barriers throughout the application and approval processes. We hope the Department will be reminded of the guiding tenet that drove Congress’s creation of the TEPSLF
and PSLF programs: that dedicating yourself to making this country better, through acting as a first responder to aid the public during emergencies, educating our students, or serving in our armed forces, among many other professions performed by those who
pursue a path in the public sector, is an honorable and deeply-needed service. These borrowers have earned relief from their student loan debt, and we will continue conducting close oversight until your Department fulfills our nation’s promise to them.

We await your response, which we hope to receive by October 4th.

 


[1] “Public Service Loan Forgiveness: Improving the Temporary Expanded Process Could Help Reduce Borrower Confusion,” Report to Congressional Requesters,
United States Government Accountability Office (September 2019) at:
https://www.gao.gov/assets/710/701157.pdf

[2] Anya Kamentz, “Teachers, Lawyers And Others Worry About The Fate Of Student Debt Forgiveness ,”
NPR (April 2017) at:
https://www.npr.org/sections/ed/2017/04/05/522575533/teachers-lawyers-and-others-worry-about-the-fate-of-student-debt-forgiveness

[3] Qualifying repayment plans under TEPSLF include: graduated, extended, consolidated standard, and consolidated graduated repayment plans.
Id.

[4] Aimee Picchi, “Student loan relief for public servants: 38,460 applied, only 262 accepted,”
CBS News (April 2019) at:
https://www.cbsnews.com/news/student-loan-relief-for-public-servants-many-apply-few-are-accepted/#

[5] Erik Ortiz, “Inside the Education Department’s effort to ‘obstruct’ student loan investigations,”
NBC News (September 2019) at:
https://www.nbcnews.com/news/education/inside-education-department-s-effort-obstruct-student-loan-investigations-n1049576

[6] Consolidated Appropriations Act, Public Law No: 115-141, Section 315 (2018) at:
https://www.congress.gov/bill/115th-congress/house-bill/1625/text

[7] Supra, see note 1. Page 13.

[8] “Kaine, Whitehouse, Duckworth, Hassan Press DeVos On Failure To Implement Public Service Loan Forgiveness,” (June 2018) at:

https://www.kaine.senate.gov/press-releases/kaine-whitehouse-duckworth-hassan-press-devos-on-failure-to-implement-public-service-loan-forgiveness

[9] Supra, see note 1. Page 14.

[10] “Questions Submitted by Senator Patty Murray: Hiring Delays at the Office for Civil Rights,”
Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
(March 2019) at:
https://www.help.senate.gov/imo/media/doc/SenMurrayQFRresponses32819LHHShearing.pdf

[11]
Supra
, see note 1. Page 17.

[12]
Supra
, see note 1. Page 22.

 

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