Representatives Panetta, Cuellar, and McBath Introduce the Public Service Loan Forgiveness Modernization Act

July 23, 2021
Press Release

Today, Congressman Jimmy Panetta (D-Carmel Valley), Congressman Henry Cuellar (D-TX), and Congresswoman Lucy McBath (D-GA) re-introduced the Public Service Loan Forgiveness Modernization Act to simplify and modernize federal student loan forgiveness programs. The U.S. Government Accountability Office has previously found major deficiencies in the U.S. Department of Education’s (DOE) administration of the Public Service Loan Forgiveness (PSLF) program and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. The Public Service Loan Forgiveness Modernization Act will establish a comprehensive database of qualified public service employers that is easily searchable, simplify communication between public service employees and the DOE, and provide a PSLF certification seal for qualified employers to use for recruitment purposes.

“Nowadays, many people who choose public service can do so with the added benefit of having their federal loans forgiven.  Unfortunately, there are many flaws in the Public Service Loan Forgiveness program that make it extremely difficult and problematic,” said Congressman Panetta.  “My legislation would reform that loan program so that it’s easier for public servants to confirm the qualifications of their employer and simplify communications between borrowers and the Department of Education.  Such a minor fix is the least that we can do for those who choose to give back to our communities and country. 

"As a United States Representative, and the most credentialed member of Congress, I legislate based on the belief that education, family values, and hard work should open doors to new opportunities for all Americans—especially those that dedicate their lives to public service," said Congressman Cuellar. "We must ease the financial burdens on our public servants by simplifying and modernizing the federal student loan forgiveness program. That is why I am supporting this common-sense legislation, to ensure that the federal government honors the promises made to student borrowers. After this challenging year, we must continue to secure debt relief for millions of Americans who need this support. As a member of the Appropriations Committee, I will continue to prioritize initiatives that give public servants the necessary resources to pay for their higher education.”

"We have so many bright, passionate young people who are graduating college and hope to give back to the country that has given so much to all of us," said Congresswoman McBath. "This bill will make it easier for our students to use their talents for public service, and I am proud we are able to provide more relief to all those seeking to serve the American people."

“The Public Service Loan Forgiveness Modernization Act offers commonsense fixes to the PSLF program that will make the promise of loan forgiveness more accessible to millions of public employees across this country. While we believe the Biden administration should be canceling $50,000 of student debt for all student loan borrowers—given how burdensome debt is for so many of the 43 million people who now shoulder that burden—these changes boost transparency for borrowers and modernize the way borrowers access information about PSLF and certify their employment,” said Randi Weingarten, President of the American Federation of Teachers. “These are all urgent fixes to a program that too many teachers, nurses and other borrowers working in public service jobs need in order to navigate the PSLF application and get the debt relief to which they are entitled. We look forward to working with the Biden administration and members of Congress like Rep. Jimmy Panetta to make the PSLF promise a reality, and to taking the first step by modernizing the program with this bill.” 

“The Public Service Loan Forgiveness (PSLF) program was created to provide civic-minded graduates with the opportunity to pursue job opportunities that promoted their interests without limiting their financial prospects. It was a simple proposition: in exchange for ten years of public service to their communities, graduates would have their student debt forgiven. Unfortunately, poor program design and implementation of the program has led to far fewer graduates benefiting from the program than intended,” said Shawn Brick, Executive Director of Student Financial Support at the University of California. “The PSLF Modernization Act would simplify and improve PSLF by allowing graduates to better identify eligible public service employers and streamline communication between those enrolled in the program and the U.S. Department of Education. This legislation is an enormous step in the right direction that helps the PSLF program fulfill its intended role as a pillar of support for the nation’s public servants, and I commend Representative Panetta for his work to help these graduates succeed in their critical work.”

“Public service workers are skilled professionals who have dedicated their lives to strengthening their communities. And during the pandemic, they have answered the call with greater courage and resolve than ever. Many could earn more if they chose different career paths, and many have taken on crushing student debt in order to get the education and credentials they need to be so effective at their jobs. In principle, the Public Service Loan Forgiveness Program is supposed to ease their financial burden; in practice, the program is notoriously dysfunctional, failing to reach and serve many thousands of people who qualify. Representative Panetta’s legislation represents a long overdue fix, which would provide peace of mind to so many AFSCME members and attract more people to public service,” said Lee Saunders, President of the American Federations of State, County, and Municipal Employees.

Established in 2007, the PSLF program forgives federal student loans for qualified employees working full-time for a qualified public service employer.  After 120 on-time payments over 10 years, qualified applicants will have the remainder of their federal loans forgiven.  Only 2.41% of processed PSLF applications have been approved since the program began, even after an increase in claim approvals in 2020.

In response to the gross mismanagement of the program, Congress created TEPSLF to assist applicants who faced barriers obtaining loan relief due to miscommunication regarding eligible PSLF employers and repayment plans.  Specifically, Congress mandated the U.S. Department of Education develop and make available a simple method for borrowers to apply for loan forgiveness. In the first year of the TEPSLF program, the U.S. Department of Education denied 99% of TEPSLF applications.  Moreover, of the $700 million allocated to the program, the department spent less than four percent of what they were given.

 

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