Senate Democrats Demand Fair and Consistent Treatment of Student Loan Borrowers in Public Service
Senators: “Our nation’s student loan borrowers who uphold their commitments expect the federal government to do the same.”
Recent announcements by the U.S. Department of Education suggest some borrowers can’t rely on their prior notices about debt relief – LINK
(Washington, D.C.) – Led by Senators Claire McCaskill (D-MO), Kirsten Gillibrand (D-NY), Bill Nelson (D-FL), and Patty Murray (D-WA), 36 Senators today sent a letter to Secretary of Education Betsy DeVos expressing 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).
“Our nation’s student loan borrowers who uphold their commitments expect the federal government to do the same,” wrote the Senators. “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.” “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.”
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 Senators McCaskill, Gillibrand, Nelson, and Murray, the letter was signed Senators Schumer (D-NY), Leahy (D-VT), Feinstein (D-CA), Wyden (D-OR), Durbin (D-IL), Reed (D-RI), Cantwell (D-WA), Menendez (D-NJ), Cardin (D-MD), Sanders (I-VT), 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), Carper (D-DE), and Brown (D-OH).
The text of the full letter is below.
April 6, 2017
The Honorable Betsy DeVos
Secretary of Education
U.S. Department of Education
400 Maryland Avenue, SW
Washington, DC 20202
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.