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Friday, May 27, 2022
99.6 percent of applicants to a hopeful student loan forgiveness program were denied help, sparking questions from congress members.

99.6 percent of applicants to a hopeful student loan forgiveness program were denied help, sparking questions from congress members.

Legislators demand answers on student loan forgiveness process

Twenty-eight thousand people struggling with student debt have applied to the Public Service Loan Forgiveness (PSLF) program since its implementation.

Only 96 have been approved, however, marking a denial rate of 99.6 percent.

U.S. Rep. Mark Pocan, D-Black Earth, joined 29 members of Congress Monday in writing to Secretary of Education Betsy DeVos to voice concerns and request further information about the program’s handling.

“We are deeply troubled that millions of dedicated public servants may not obtain the loan forgiveness that they deserve if the Department [of Education] does not act quickly to correct program implementation issues,” the signees said.

The PSLF was created by Congress in 2007 in order to provide loan forgiveness for applicants who have spent at least 10 years in public service jobs, like teaching, nursing, public safety or nonprofit work.

The letter notes that the Government Accountability Office’s audit of the program indicated a lack of transparency and communication on the program’s specifications for potential recipients.

In August, Seth Frotman — who was tasked with overseeing the program for the Consumer Financial Protection Bureau (CFPB)resigned, citing what he viewed as the Trump administration’s unwillingness to help students struggling with their debt.

“Unfortunately, under your leadership, the Bureau abandoned the very consumers it is tasked by Congress with protecting,” Frotman wrote to CFPB Director Mick Mulvaney.

He alleged the CFPB has unfairly benefitted private companies tasked with collecting debt from student borrowers.

“The American Dream under siege, told through the heart-wrenching stories of individuals caught in a system rigged to favor the most powerful financial interests,” Frotman said.

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Frotman and the members of Congress saw the problem forming early on. In April 2017, Congress requested information and improvement for PSLF in hope of reducing confusion upon the implementation date. The signees said, “the Department inexplicably denied these requests.”

The congress members requested DeVos and the Department of Education provide PSLF implementation data for borrowers attempting to use the program no later than Nov. 27 of this year.

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