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“Since its inception, the Public Service Loan Forgiveness Program has failed to help ease the student debt burden for our nation’s public servants,” Sen. Gillibrand said.
By Forum Staff
U.S. Sen. Kirsten Gillibrand (D-N.Y.) on Thursday released her original report on the shortcomings of the Public Service Loan Forgiveness program and how it has failed to bring relief to New York borrowers pursuing public service careers. While the program was created to alleviate student loan debt for individuals committed to public service careers for 10 years, PSLF has been plagued by administrative errors and eligibility restrictions that have prevented many Americans from receiving the forgiveness they were promised and have earned. In fact, since its inception, only approximately 1 percent of all public servants who have applied for the program have received loan forgiveness due to flawed implementation and confusing program requirements. Coupled with the release of her report, Gillibrand is pushing for passage of the What You Can Do for Your Country Act, which would expand PSLF eligibility so that every type of federal loan and repayment plan is included in the program – including FFEL program loans – and would provide a partial forgiveness benefit after five years.
Topline findings from Senator Gillibrand’s report revealed the following:
- 1 out of every 14 PSLF participants denied loan forgiveness lives in New York.
- Only 1.2 percent of PSLF participants in New York have had their loans forgiven.
- PSLF participants in New York still owe more than $8 billion, representing nearly 10% of all outstanding federal student debt in the state.
PSLF’s shortcomings are particularly apparent in New York, which has one of the largest populations of federal, state, and local government employees in the U.S. As of March 2021, New Yorkers’ total federal student loan debt portfolio stood at $91.9 billion. Of that, $8.3 billion – nearly one-tenth – is held by PSLF borrowers with eligible employment who are awaiting forgiveness.
The Public Service Loan Forgiveness Program was established in 2007 to help more students choose careers in public service. The program provides loan forgiveness to eligible Direct Loan borrowers after 10 years of working full-time for federal, state, local, or tribal governments, and certain nonprofit organizations. Senator Gillibrand has repeatedly called for fixes to the PSLF program, especially throughout the duration of the pandemic when essential public service professionals were serving on the front lines. In May of 2021, Gillibrand, alongside U.S. Senator Tim Kaine (D-VA) and Congressman John Sarbanes (D-MD), led more than 50 Senate and House colleagues in a letter to the Department of Education calling for increased support for the nation’s public service workers who served on the front lines of the coronavirus pandemic.
“Since its inception, the Public Service Loan Forgiveness Program has failed to help ease the student debt burden for our nation’s public servants. As a result, millions of social workers, service members, health care workers, public defenders, and others have been denied the support they earned through their hard work and service to our communities,” Gillibrand said. “New Yorkers disproportionately bear this burden, representing an outsized share of the borrowers denied PSLF forgiveness and carrying more than $8 billion in unforgiven debt.”
