Attorney General Ellison calls for extension of student loan waiver for public servants, frontline workers
Joins 20 AGs in urging Biden Administration to provide more time and opportunity for borrowers to achieve loan forgiveness under Public Service Loan Forgiveness program
August 2, 2022 (SAINT PAUL) — Minnesota Attorney General Keith Ellison has joined a coalition of 20 states in urging the Biden Administration to extend and expand temporary changes to the Public Service Loan Forgiveness (PSLF) Program to provide borrowers with more opportunities to get closer to loan forgiveness faster.
Under the PSLF Program, remaining balances on federal Direct Loans are forgiven after borrowers — dedicated public servants such as teachers, firefighters, nurses, police officers — make 120 qualifying payments while working full-time for a qualifying employer. However, due to the PSLF Program’s complexity and poor management, millions of public service workers have been unable to access forgiveness, and the program’s denial rates have been as high as 99 percent.
To restore the promise of PSLF, in October 2021, the U.S. Department of Education announced a temporary “Limited PSLF Waiver” which temporarily offers millions of qualifying public service workers the chance to have previously nonqualifying repayment periods counted toward loan forgiveness. The Department plans to conduct a one-time account adjustment later this fall that will count certain long-term forbearance periods toward forgiveness under PSLF.
In a letter to President Biden and Education Secretary Miguel Cardona, Attorney General Ellison and the attorneys general request an extension of the Limited PSLF Waiver’s deadline on October 31, 2022. They argue that many borrowers remain unaware of or confused by the waiver and that an extension is necessary to enable borrowers to get the information and help they need to secure critical waiver benefits. The letter also cautions against ending the waiver just two months after the federal loan portfolio is scheduled to resume repayment, amidst an ongoing transfer to a new PSLF servicer. Further, the letter expresses concerns over subjecting borrowers to repeated PSLF rule changes over a relatively short period of time.
“The PSLF program is based on a simple promise: in exchange for serving the public while making payments for 10 years, the federal government will forgive the balance of your federal loan debt. But confusion and practical difficulties continue to make it hard for people to access this needed relief, so far too often, this promise has not been honored in the past. I applaud the Biden Administration’s efforts to make things right and give public servants the relief they’re entitled to. As Minnesota’s chief protector of consumers, I encourage the administration to take up the measures we outlined in our letter so that our public servants and nonprofit workers who have held up their end of the bargain get the debt relief they deserve,” Attorney General Ellison said.
Attorney General Ellison also urged student loan borrowers to review if they might be eligible for relief and take action on their loans before it’s too late: “Unless the administration can make the adjustments we urged in our letter, the deadline to take action and get the benefit of the PSLF waiver runs out on October 31 of this year. Minnesotans that have worked in government or a nonprofit and are unsure if they’re on track for PSLF loan discharge should immediately review information about the program and take immediate action if they think they might be eligible for the waiver.”
Attorney General Ellison and the attorneys general write the President and Secretary Cardona that this relief is essential for public servants and frontline workers, including healthcare workers, who took great risks to serve the public during the COVID-19 pandemic. “As you know, the pandemic has placed a tremendous strain on public service workers, many of whom served on the frontlines making difficult personal sacrifices to keep our communities safe, healthy, and educated. These sectors, including our healthcare and education workforces, are suffering employee burnout and shortages. It is of the utmost importance that the PSLF Program function to alleviate the financial strain associated with student debt and support these critical sectors as our nation continues its recovery.”
They also argue that the waiver should automatically count all forbearance periods toward loan forgiveness and should be made available to all federal loan borrowers to address pervasive servicer misconduct and resulting missed opportunities to make qualifying payments. Previously documented servicer misconduct includes servicer delays and defects in the loan-consolidation process, servicers enrolling borrowers into non-qualifying repayment plans despite borrowers expressing interest in PSLF, and servicers providing inaccurate counts of qualified payments made by borrowers, among other problems.
In addition, the attorneys general advocate for equal treatment for all federal loan borrowers by recommending that waiver benefits be expanded to include all Parent PLUS borrowers and borrowers who obtained FFEL joint consolidation loans with spouses.
Joining Attorney General Ellison in signing the letter, which co-led by Illinois Attorney General Kwame Raoul and Massachusetts Attorney General Maura Healey, are the attorneys general of California, Colorado, Connecticut, District of Columbia, Delaware, Hawaii, Iowa, Maryland, Michigan, North Carolina, New Jersey, New Mexico, New York, Oregon, Vermont, Washington, and Wisconsin.