Nessel joins coalition in urging Department of Education to fix broken Public Service Loan Forgiveness program

LANSING — Michigan Attorney General Dana Nessel joined a coalition of 22 attorneys general in urging the U.S. Department of Education (DOE) to take robust action to fix the broken Public Service Loan Forgiveness (PSLF) program. Since borrowers first became eligible for relief in 2017, almost all PSLF applications have been rejected, leaving millions of public servants in the lurch. 

These teachers, nurses, public interest attorneys, social workers, first responders, servicemembers, and others incurred significant student loan debt in order to gain the skills necessary to educate, heal, and protect our communities — under the promise that a portion of these loans would eventually be forgiven. In today’s letter, the coalition applauds DOE’s commitment to improving implementation of the PSLF program and urges DOE to act quickly to fix the failures in the program’s administration.

“The effectiveness of the PSLF program has been abysmal thus far,” Nessel said. “We owe it to those who are dedicating their lives to public service to ensure that commitment is properly acknowledged and appreciated. Otherwise, the bipartisan support for the program was wasted effort.” 

A bipartisan Congress created the PSLF program in 2007 to encourage student loan borrowers to enter public service jobs in return for forgiving the remaining balance of their federal student loans after ten years of on-time loan payments. When the first wave of borrowers applied for loan forgiveness in 2017, DOE denied applicants at the alarming rate of 99 percent. In 2018, a bipartisan Congress gave DOE a second chance to deliver on PSLF’s critical promise by creating the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. Despite this emergency fix, relief continues to be out of reach for nearly all who apply. To date, DOE has denied 96% of TEPSLF applications.

Drastic action by DOE is required to make the promise of PSLF forgiveness a reality for the nation’s dedicated public servants. State attorneys general have a unique perspective on how to improve administration of PSLF/ TEPSLF resulting from their experience investigating and holding student loan servicers accountable for violating the law, including misadministration of the PSLF/TEPSLF program. In today’s comment letter, the attorneys general urge DOE to:

• Provide immediate relief to borrowers who have been harmed by the misadministration of the PSLF/TEPSLF program;

• Improve servicer oversight and accountability by carefully selecting a new servicer that will be responsive to borrowers and creating new incentives and operating procedures that put borrowers first;

• Extend the pause on payments on student loans that started in response to the COVID-19 pandemic;

• Conduct broad outreach to all borrowers potentially interested in forgiveness, including those who have yet to apply and those who have already received denials; and

• Affirmatively correct errors discovered for all affected borrowers.

Joining Attorney General Nessel in this letter are the attorneys general of California, Colorado, Connecticut, Dela­ware, the District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, and Washington.