Public Service Loan Forgiveness: Opportunities for Education to Improve Both the Program and Its Temporary Expanded Process
Fast Facts
Click here to enter text. Public Service Loan Forgiveness: Opportunities for Education to Improve Both the Program and Its Temporary Expanded Process
The Public Service Loan Forgiveness program forgives federal student loan balances for borrowers who have made 10 years of payments while working in certain public service jobs.
We testified that about 99 percent of borrower applications for loan forgiveness have been denied, and that borrowers may be confused about program requirements. The Department of Education does not provide enough information on program requirements—such as a comprehensive list of qualifying employers.
We recommended in 2018 and 2019 that Education make more information available to borrowers.
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Highlights
What GAO Found
A large number of borrowers are pursuing the Public Service Loan Forgiveness (PSLF) program, but the Department of Education (Education) has denied about 99 percent of loan forgiveness applications as of March 2019. Close to one-half of these applications were denied because the borrowers had not yet made the required 120 qualifying monthly loan payments. As of May 2019, Education has also denied 99 percent of loan forgiveness requests made through the temporary expanded process, which is intended for borrowers who did not initially qualify for the PSLF program.
In its 2018 report, GAO found that shortcomings in the information Education provided to the loan servicer that administers the PSLF program increased the risk of administrative errors. For example, Education had not provided the PSLF servicer with a definitive source of information for determining which employers qualify. GAO made three recommendations to Education to address these issues (see table below). Education agreed with these recommendations and has taken some actions, but has not yet fully implemented them.
|
Recommendations for Providing Information to the PSLF Servicer |
Status |
|
Develop a timeline for issuing a comprehensive guidance and instructions document for PSLF servicing |
Not fully implemented |
|
Provide additional information for determining which employers qualify for PSLF |
Not fully implemented |
|
Standardize the payment information the PSLF servicer receives from other loan servicers for determining qualifying payments for PSLF |
Not fully implemented |
Source: GAO-18-547. | GAO-19-717T
In its 2018 and 2019 reports, GAO found that Education can provide better service to borrowers by expanding outreach, streamlining processes, and sharing critical information with borrowers. For example, GAO found that Education does not include information for borrowers about the temporary expanded process in key online sources. GAO made five recommendations to Education to address these issues with the PSLF program and the temporary expanded process (see table below). Education agreed with these recommendations, but has not yet fully implemented them.
|
Recommendations for Improving Service to Borrowers |
Status |
|
Include information about the temporary expanded process in the online PSLF Help Tool |
Not fully implemented |
|
Require loan servicer websites to provide information on the temporary expanded process |
Not fully implemented |
|
Integrate the request for the temporary expanded process into the PSLF application |
Not fully implemented |
|
Provide borrowers with sufficiently detailed information to be able to identify any errors in the PSLF servicer's counts of qualifying payments for the PSLF program |
Not fully implemented |
|
Provide borrowers more information on options for contesting temporary expanded process decisions and denials |
Not fully implemented |
Source: GAO-18-547 and GAO-19-595| GAO-19-717T
Why GAO Did This Study
The PSLF program was established in 2007 and forgives borrowers' remaining federal student loan balances after they have made at least 10 years of qualifying loan payments while working in public service. Starting in September 2017, the first borrowers potentially became eligible for the PSLF program and began applying to have their loans forgiven. In 2018, Congress appropriated $700 million to temporarily expand the PSLF program for certain borrowers who initially did not qualify for the program.
This statement—based on GAO's reports issued in September 2018 (GAO-18-547) and September 2019 (GAO-19-595)—discusses (1) the extent to which borrowers' requests for loan forgiveness through PSLF and the temporary expanded process have been approved or denied, (2) the extent to which Education provides the PSLF servicer with sufficient information to administer the program, and (3) opportunities for improving service to borrowers.
Recommendations
GAO has made eight recommendations to Education to improve its implementation of the PSLF program and its temporary expanded process. Education agreed with GAO's recommendations. As of September 2019, GAO continues to believe that actions are necessary to fully implement all of the recommendations discussed in this statement.