98% of those who apply for relief from debt through the Public Service Loan Forgiveness Program are rejected.
200 organizations urged Biden not to forgo student debts of those who have served more than ten years in public service.
Biden has not yet implemented reforms to his program, something he pledged to do during his campaign.
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Public Service Loan Forgiveness (PSLF), was established to provide student-debt relief for public servants such as teachers, government workers and non-profit workers after ten years of service. However, 98% of these public servants are still denied relief. This prompts advocates to urge President Joe Biden for urgent reform.
On Wednesday, more than 200 advocacy groups, including the Student Borrower Protection Center sent Education Secretary Miguel Cardona a letter describing how PSLF has failed its promise to provide student-debt relief.
They claimed that PSLF was created by Congress in 2007 to ensure public servants were not "locked in a life of debt." But the reverse has occurred and many borrowers have been denied relief.
According to the letter, workers across the country faced systemic and widespread barriers to PSLF as they responded to an unprecedented public emergency, navigated deep economic recession, and struggled to recover from an unjust economic recovery. Public service workers have been left on the hook for unpaid debts throughout the pandemic. This has caused a psychological and financial shock that continues to this day.
Cardona was asked by the organizations to implement three reforms in order to correct the "systemic failure" that led the program.
All student debt should be eliminated for people who have served in public service for over ten years. Change the eligibility criteria to only consider the length of public service. Credit will be granted for each year. Automate student-debt relief.
Biden pledged to reform PSLF during his campaign. The Education Department is currently involved in the rulemaking process that the organizations reference. This process involves a long process of receiving public comments and debating the reforms in committees. Cardona was urged by the organizations in the letter by the organizations to implement the reform without the rulemaking process and use any authority that he may have under the law to do so.
Insider previously reported that the program is flawed and is affecting public servants who are eligible. On Tuesday, the Student Borrower Protection Center published data that showed over 4,500 teachers were denied loan forgiveness in PSLF due to minor paperwork errors, such as failing to sign the date next their signature. Others were denied because their school was not a public-service employer.
Insider reported this month that the program may see minor improvements if it continues on its current course, but will still approve only 20% of borrowers to forgive them by 2026.
Even those who were able to obtain relief through PSLF faced bureaucratic obstacles. Insider spoke with David O'Keefe who was a public servant and was able to get his $20,000 student loan balance wiped out using the program. However, he was incorrectly informed that he was not eligible. He had to do follow-up after following-up to make sure his paperwork was being processed correctly.
O'Keefe stated, "It was always the same thing over and over again." It was very frustrating.
