April 15, 2019

Duckworth, Durbin Introduce New Bill to Overhaul Public Service Loan Forgiveness Program

Bill Would Ensure All Federal Loans and Repayment Plans Qualify and Simplify the Application and Approval Process


[WASHINGTON, D.C.] – U.S. Senators Dick Durbin (D-IL) and Tammy Duckworth (D-IL) joined Senators Kirsten Gillibrand (D-NY) and Tim Kaine (D-VA) and a group of 13 Senators to introduce the What You Can Do for Your Country Act of 2019, new legislation that would overhaul the flawed Public Service Loan Forgiveness (PSLF) program and ensure millions of teachers, social workers, members of the military, first responders, nurses, public defenders, and many other public service professionals will qualify for the loan forgiveness they have earned. For years, the Department of Education has failed to properly implement the PSLF program, which has resulted in less than 1 percent of all eligible applicants receiving the loan forgiveness they deserve. This bill expands eligibility so that every type of federal loan and repayment plan is now included in the program, and ensures that public servants can count on repayment when they apply for loan forgiveness. 

“Millions of hard-working Americans who chose to dedicate their careers to public service are being wrongfully denied the student loan debt relief they deserve,” Duckworth said. “I’m proud to join my colleagues in introducing this bill that makes common-sense fixes to the Public Service Loan Forgiveness Program and helps ensure our nation supports those who enter vital professions like the military, education, law enforcement and healthcare.”

“Secretary DeVos is failing to provide $700 million Congress intended for student debt relief for public servants. These are teachers, firefighters, nurses who deserve the chance to get the relief they earned,” Durbin said. “Today I introduced a bill that would ensure all federal loans and repayment plans qualify for this critical incentive for public service careers. If Secretary DeVos doesn’t want to stick up for these hardworking and dedicated public servants, than Congress should.”

Last month, Durbin confronted Secretary Betsy DeVos at the Labor-HHS-Education Appropriations Subcommittee hearing about the Department’s denials of PSLF applications and the Administration’s proposed elimination of the Public Service Loan Forgiveness program. Video of that exchange is available here.

Congress established the PSLF Program in 2007, but of the 1,173,420 public servants who have applied for forgiveness under the program, only 55 borrowers were approved according to GAO. Studies have found that millions of borrowers took steps to enroll in the PSLF program, but were told after they had already made payments that they had the wrong type of loan or repayment plan and would not qualify for forgiveness under the program. Kaine helped fix a glitch in the current PSLF program by introducing legislation - passed by Congress last year - that funded loan relief for borrowers who were denied PSLF because they were in the wrong repayment program. However, the Trump Administration has also failed to properly implement the temporary loan relief program (TEPSLF).

In addition to Durbin, Duckworth, Gillibrand, and Kaine, this legislation is cosponsored by Senators Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), Amy Klobuchar (D-MN), Kamala Harris (D-CA), Chris Van Hollen (D-MD), Cory Booker (D-NJ), Jeanne Shaheen (D-NH), Jeff Merkley (D-OR), Maggie Hassan (D-NH), Bernie Sanders (I-VT), and Tammy Baldwin (D-WI).

The What You Can Do for Your Country Act of 2019 would do the following:  

  • Allow all types of federal loans to qualify. The bill would allow borrowers with both Direct Loans, and loans in the Federal Family Education Loan (FFEL) program, to qualify for forgiveness. Under current law, borrowers who took out federally-backed FFEL loans have been deemed ineligible for PSLF. This bill would allow borrowers to consolidate their loans without losing credit toward forgiveness.
  • Allow all federal repayment plans to qualify. Borrowers enrolled in any federal student loan repayment plan would be eligible to receive forgiveness. Under current law, borrowers who are on “extended” or “graduated” repayment plans fall into a loophole and are generally ineligible. 
  • Ensure that the Department of Education provides public servants with clearer information and guidance. The U.S. Department of Education would be required to give borrowers better up-front information about whether they qualify, how many payments are counted and why, and what they can do to dispute any issue with how their progress is determined. Borrowers who “pay ahead” will be clearly able to apply these payments toward forgiveness. 
  • Allow borrowers to receive a partial forgiveness benefit after five years of public service. Instead of making borrowers wait a full 10 years to receive full forgiveness, borrowers could have half of their loans forgiven at 5 years, with the remaining balance forgiven at the end of 10 years. This allows borrowers to contribute a shorter, but still meaningful, period of public service and to ensure they can still receive a benefit from giving back.
  • Simplify the application and certification process. The Department of Education would be required to provide a fully electronic system to upload and process all forms to ensure a more streamlined process. The Department would also be required to establish a database of qualifying federal and state employers to help some borrowers automatically qualify.