UNITED STATES
A US lawmaker is questioning why tens of thousands of Public Servants who have completed the Federal Loans Forgiveness Program have been denied relief by the Department of Education, while fewer than 300 have had success.
Democrat Senator Tim Kaine (pictured), who helped develop the Program, said US$700 million (A$986 million) had been authorised to ensure PS employees — including firefighters, teachers and nurses — received the loan forgiveness they had earned, and hardly any of the money had been used.
Senator Kaine and other Senate Democrats said the Education Department had suddenly created eligibility criteria that were far more rigid than anything Congress envisioned.
“They have restricted access with a litany of rules,” Senator Kaine said.
It has been about a year since the Education Department launched the temporary expansion of the Public Service Loan Forgiveness Program, with US$700 million from Congress to spend over two years.
The goal was to give PS employees who had been enrolled in the wrong repayment plan through no fault of their own another shot at having the balance of their debt erased after 10 years of on-time payments.
In response to an inquiry from Senator Kaine, the Education Department disclosed last week that 38,460 people had submitted requests for forgiveness as of 28 December 2018 under the new program.
Most were immediately rejected because they had not previously filled out a formal loan forgiveness application — one of the many criteria of the relief program.
Of the 9,820 applicants who cleared the first hurdle, 1,184 were still under consideration.
The rest were rejected for a variety of reasons, including that they were paying money into the wrong payment plan or had failed to get certification of their payments from their employer.
Only 262 people had jumped through all of the hoops and had been paid out a total of US$10.6 million (A$15 million) in forgiven loans.
“We’re talking about thousands of people who have given a decade of service to our country, and the Education Department is leaving them out to dry,” Senator Kaine said.
Washington, DC, 4 April 2019
