This Week In Washington
On the heels of last week’s Democratic letter to the Department of Education (ED) requesting more information about the Public Service Loan Forgiveness Program’s (PSLF) high denial rate, Senator Tim Kaine (D-VA) shared with POLITICO an update from ED on the Temporary Expanded Public Service Loan Forgiveness Program (TEPSLF), which is also seeing a high denial rate. Recall, the TEPSLF program is a first-come, first-served fund that was created to help borrowers who would have otherwise been eligible for PSLF but were in the wrong repayment plan under standard PSLF requirements to receive loan forgiveness.
Responding to the Senators’ letter expressing concerns about TEPSLF requirements and outreach, ED reported (subscription required) that as of the end of September over 28,000 requests for TEPSLF had been received by ED, but 77% of those requests were ineligible for further review. Of those granted additional review, half were denied outright. ED said the top three reasons for denial were: not being in repayment for 10 years, the loans were not eligible for forgiveness, and borrowers lacked 10 years of certified employment. Because TEPSLF was included again in this year’s education spending bill, there are additional funds available for borrowers to use in this program. It is unclear how lawmakers will ultimately address their concerns with the administration of both PSFL and TEPSLF, but we will keep you posted on any new developments.
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Experts, including AccessLex Institute President and Chief Executive Officer Christopher P. Chapman, were not surprised that only a small percentage of initial Public Service Loan Forgiveness applications met the eligibility requirements for forgiveness and expect approval rates to increase over time .
For more information on PSLF’s program requirements and to get a step-by-step plan borrowers can follow to be sure they prepare a successful application, attend our free webinar, “Your PSLF Action Plan,” on Tuesday, October 30 at 12:00 p.m. ET. Register here.
The Brookings Institution released a report on graduate student borrowing and repayment that showed that average debt balances are rising across sectors, but that 5-year default rates and repayment rates were worst for graduate borrowers from for-profit institutions.
No relevant bills have been recently introduced for consideration by the 115th Congress.