The federal student loan forgiveness program was supposed to help thousands of public servants. Instead, it’s impacted less than a busload
In 2007, the federal public servant student loan forgiveness program was signed into law, and 2017 was the first year that loans could be forgiven. But while the program was supposed to bring great relief to public servants, including government workers and non-profit employees, only a tiny handful of people were approved, of tens of thousands of applications.
According to CNBC, 34,000 people applied for loan forgiveness, but only 26 were approved.
Why has the program, which was supposed to help an amazing one-fourth of Americans, helped less than one percent of applicants? Analysts say that it’s a combination of applicants not understanding the qualifications and the qualifications being too difficult to meet.
As it stands, under the public service loan forgiveness program, applicants who have worked in the public sector for ten years, and who have paid down their student loans for ten years (120 payments) can have the remainder of their loans erased. But many people planned their careers and lives around this program only to discover that they didn’t qualify for other reasons: they didn’t have the right type of loan (federal direct loans), they missed a payment, they didn’t stick to a standard repayment plan, or they consolidated their loans, thus resetting the clock on their eligibility date.
Congress made some fixes to the program earlier in the year, expanding the type of loan repayments that qualify. But it hasn’t seemed to help any significant number of graduates get forgiveness.
Critics of the program placed some of the blame on embattled Education Secretary Betsy DeVos and the Trump administration, for not making the guidelines of the program clear, and for failing to help guide students toward the resources they need to get loan relief.
“I hope the Trump Administration will turn things around by creating a simple process that gives fair consideration to the teachers, military personnel, law enforcement officers, and other public servants who apply for this debt relief,” said Senator Tim Kaine said, a democrat representing Virginia.
This isn’t the only trouble facing the once-popular loan forgiveness program. Earlier in the year, embattled Education Secretary Betsy DeVos proposed cuts to the federal loan forgiveness program, which would make it harder for indebted students to clear their loans even when they had been defrauded by their university.