Reps. Panetta, Fudge Introduce Public Service Loan Forgiveness Modernization Act

September 18, 2019
Press Release

WASHINGTON, DC – Today, Congressman Jimmy Panetta (D-CA) and Congresswoman Marcia L. Fudge (D-OH) introduced the Public Service Loan Forgiveness Modernization Act to simplify and modernize federal student loan forgiveness programs.

Recent U.S. Government Accountability Office reports have found major deficiencies in the U.S. Department of Education’s administration of the Public Service Loan Forgiveness (PSLF) program and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program.

"The PSLF and TEPSLF programs were created to encourage promising, responsible graduates to serve their nation.  Unfortunately, the programs have become a bureaucratic nightmare. The Administration is failing its duty to competently execute the law," said Congressman Panetta.  "The Public Service Loan Forgiveness Modernization Act will simplify and modernize federal student loan forgiveness program. We must support the nurses, teachers, emergency responders, servicemembers, and other public servants who have dedicated their lives to helping their fellow citizens."

"Congress and this Administration have a duty to honor the promise made to student borrowers who devote their careers to underserved communities," said Congresswoman Fudge.  "To deny public servants the student loan forgiveness they expected is nothing more than bait-and-switch.  A 99 percent denial rate of forgiveness requests is unacceptable, and severs the trust our students have in programs that incentivize public service.  The Public Service Loan Forgiveness Modernization Act will provide clarity for individuals and employers and brings the process for PSLF enrollment into the 21st century."

"The Public Service Loan Forgiveness Modernization Act is a crucial part of the urgent fix we need to secure the debt relief millions of Americans are owed—and that Betsy DeVos and Donald Trump are determined to deny.  This bill will boost transparency so borrowers know which employers qualify for PSLF, and ensures that borrowers will be alerted in advance when they need to recertify their jobs—logical policies the Department of Education could implement, but has chosen not to.  PSLF is a promise we made to America’s public servants, but it’s become a cruel hoax in the Trump/DeVos administration.  That’s why we support this bill with the greatest possible enthusiasm and endorse its rapid passage," said Randi Weingarten, President of the American Federation of Teachers.

The Public Service Loan Forgiveness Modernization Act will establish a comprehensive database of qualified public service employers that is easily searchable on a public website and free software application.  Further, it will simplify communication between public service employees and the Department of Education by providing borrowers a 60-day notice of employment recertification requirements and an annual statement of qualified payments made to date.  The legislation will also provide a PSLF certification seal for qualified employers to use for recruitment purposes.

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.  As of April 2018, more than 1,000,000 borrowers had taken steps to pursue PSLF from the Department of Education.  A total of 55 individuals were granted loan forgiveness.

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.