Public Service Debt Relief Is Broken
The program that’s supposed to help teachers and others with their loans isn’t working.
By Randi Weingarten
Ms. Weingarten is the president of the American Federation of Teachers.
Sept. 27, 2018
This summer, student debt reached a record $1.5 trillion in the United States. To put that in perspective, student loan borrowers in this country are carrying debt equal to Russia’s gross domestic product in 2017. Over half say it’s preventing them from saving for retirement or for an emergency; more than 10 percent of borrowers are in default because they can’t pay their minimum balance.
This crisis exists in part because actions by the Trump administration and the student-loan servicing companies it employs have condemned many people who’ve sought an education to a lifetime of debt.
It wasn’t supposed to be this way. Eleven years ago, Congress created the Public Service Loan Forgiveness program. In exchange for 10 years of service to America — in its public schools, military, Civil Service or nonprofit service organizations — and making payments for those 10 years, qualified borrowers could have their debt forgiven.
This year, Republicans in Congress introduced a bill to eliminate the program. While that legislation lays dormant for now, there’s another hurdle for people working in public service: The student- loan servicing companies the Department of Education keeps on contract to administer the program are accused by borrowers of sabotaging loan forgiveness by providing false information, delaying the processing of qualifying payments, and failing to certify eligible public service jobs.
New Department of Education data confirms that the program is not operating properly. As of June 30, only 96 out of the 28,000 who had applied for forgiveness since 2017 had actually had their student loans discharged.
As the union representing 1.7 million professionals around the country, many who work in public service, the American Federation of Teachers is trying to help. We’ve hosted student debt clinics nationwide to help our members learn about their repayment options. Some borrowers aren’t aware of the government’s loan forgiveness program because, in many cases, the Department of Education and loan servicer fail to adequately inform them of it. Those who do know of it have told us of their difficulties in trying to meet its requirements.
Take Lisa Oelfke, a health policy analyst in Maryland, who repeatedly got confusing information from her student-loan servicer. She made three years of what she thought were qualifying payments under the program, only to learn that she was not enrolled in a qualifying repayment plan, despite having submitted forms to certify her work in public service. That means that Ms. Oelfke is now 10 years from payoff, instead of seven.
Falynn Newman got a bit luckier. She’s been teaching in New York for three years, and attended one of our debt clinics as a first-year teacher. The trainers helped her through the hours of questionnaires, paperwork and certifications required to qualify for the loan-forgiveness program.
“I wouldn’t have known about the program if I hadn’t gone to the clinic,” she said.
There are thousands of stories like these, and the Education Department’s new data on the underuse of the program make them even more alarming.
In recent months, educators and other school personnel have walked out to demand a living wage in exchange for the jobs they love. Teachers are working in fast food restaurants or selling plasma to pay their bills. By failing to ensure that public loan forgiveness operates as intended, the Education Department is condemning them to a lifetime sentence in debt.