DeVos to Defend Indefensible Budget That Kills Public Service Loan Forgiveness Program

Washington DC (February 27, 2020) – It’s that time of the year again when billionaire Trump Education Secretary Betsy DeVos must face Congress to defend the budget blueprint for her right-wing, ideological education agenda. Among the many controversial line items in the administration’s FY 2021 budget, DeVos is proposing — for a fourth year in a row — to fully dismantle the Public Service Loan Forgiveness (PSLF) program.

The PSLF program was created in 2007 with strong bipartisan support. That’s because it’s common sense for the government to forgive federal student loans for those who pursue careers that may not pay the best, but are a benefit to the community, like a firefighter, teacher, nurse, or public defender. The bar to qualify wasn’t meant to be high: just keep up with loan payments for 10 years while working for the government or in the public interest. Unfortunately, the program has matured for many Americans on the watch of Secretary DeVos, who apparently thinks public service and keeping the government’s promise is for the birds.

Through 2018, DeVos’ Education Department approved less than 300 borrowers for public service loan forgiveness among nearly 40,000 applicants – an abysmal 99% rejection rate. Thousands of nurses, firefighters, teachers, and other professionals, who were promised forgiveness after a repayment period, are now facing the prospect of having to pay back the full balance of their student loans on a limited income. And it’s become clear that this was not a bug but a feature of DeVos’ oversight. In September 2019, the Government Accountability Office (GAO) criticized DeVos in a scathing report for not properly utilizing a 2018 congressional “fix” designed to make it easier for public service professionals to complete the paperwork for PSLF.

“Secretary DeVos may have failed year after year to kill this bipartisan loan forgiveness program, but that hasn’t stopped her from making it as hard as possible for public service professionals to qualify for it,” said Derek Martin, director of Allied Progress. “The Trump administration has no good excuse for denying these hard-working public servants the relief they deserve for their sacrifices, but following the money reveals why they’re doing it. The student loan servicing industry, which has given nearly $2 million to Trump’s supporters in Congress, would rather keep these selfless student borrowers on the hook and paying interest for decades to come. And in this administration, money trumps everything.” 

Allied Progress recently released results of a national poll that found Secretary DeVos’ approval rating has plummeted to 28 percent, and that there’s strong support across the political spectrum for Congress to investigate her recent misconduct.

WHAT YOU NEED TO KNOW:

Déjà Vu For Betsy DeVos: FY2021 Budget Proposal Replays Failed Record On Student Loan Forgiveness

The Trump-DeVos FY 2021 Budget Would Eliminate The Public Service Loan Forgiveness (PSLF) Program, Which Enables Borrowers To Accept Lower Paying Jobs In the Public Sector Like Teaching, Nursing, And Social Work, While Still Being Able To Manage Their Student Debt.

The FY 2021 Budget Proposes “Eliminating The Public Service Loan Forgiveness Program.”

The “Budget Again Proposes Eliminating The Public Service Loan Forgiveness Program.” “Trump’s budget again proposes eliminating the Public Service Loan Forgiveness Program.” [Michael Stratford, “Trump seeks new limits on PLUS loans, familiar cuts to student aid,” Politico, 02/10/20]

PSLF Can Be Used By “Teachers, Nurses, Social Workers And Other Public Sector Workers” To Forgive Their “Remaining Federal Student Loans” After They Have “Made 10 Years’ Worth Of Payments.”

PSLF Cancels The “Remaining Federal Student Loans” After “Made 10 Years’ Worth Of Payments” Have Been Made By People Like “Teachers, Nurses, Social Workers And Other Public Sector Workers.” “Teachers, nurses, social workers and other public sector workers benefit from the program, which cancels their remaining federal student loans after they’ve made 10 years’ worth of payments.” [Katie Lobosco, “Trump again proposes ending student loan forgiveness program,” CNN, 02/10/20]

The PSLF Program Incentivizes Workers “To Stay In Lower-Paying Public-Sector Jobs” As They Work Towards Paying “Down Their Student Debt.”

The PSLF Program “Gives Workers Incentives To Stay In Lower-Paying Public-Sector Jobs While They Paid Down Their Student Debt.” “The program was signed into law by President George W. Bush in 2007. It gives workers incentives to stay in lower-paying public-sector jobs while they paid down their student debt. The first time anyone would have made enough payments to qualify was under the Trump administration, during the fall of 2017.” [Katie Lobosco, “Trump again proposes ending student loan forgiveness program,” CNN, 02/10/20]

Borrowers Have Said If The Trump Administration Ended The PSLF Program, They Would Be Forced “To Rethink Some Life Goals,” Like Their Career Paths And Purchasing A Home.

Some Borrowers Say If The Trump Administration Eliminated PSLF, They Would Be Forced “To Rethink Some Life Goals.”

Some “Borrowers Said The Program’s Demise Would Force Them To Rethink Some Life Goals.” “Other borrowers said the program’s demise would force them to rethink some life goals.” [Elisabeth Buchwald, “Trump’s bid to end Public Service Loan Forgiveness could mean ‘major life changes’ for some student-loan borrowers,” MarketWatch, 02/15/20]

One Borrower Working As An Assistant Public Defender Said He Has Been Diligent In Ensuring He Will Qualify For PSLF But If The Program Ended, He Is “Not Sure That He Would Be Able To Keep His Job.”

One Borrower Working As An “Assistant Public Defense Lawyer” Said He Has Been Diligent In Ensuring “He Can Qualify For Student Loan Forgiveness” But “If The PSLF Program Ended, He’s Not Sure That He Would Be Able To Keep His Job.” “J.P. Gilbert, a 30-year-old assistant public defense lawyer based in central Florida, hasn’t missed a single loan repayment since he started paying off his student loan debt five years ago. He’s been diligent about making payments on time and keeping his government job so that in five years he can qualify for student loan forgiveness. […] ‘I love the work that I do but outside of the love of what I do the really biggest thing about me being in this job is the ability to qualify for the loan forgiveness program,’ Gilbert said. He now has a six-month-old daughter, and if the PSLF program ended, he’s not sure that he would be able to keep his job, he told MarketWatch. He graduated from Stetson University’s College of Law which currently costs $44,468 a semester for full-time students. [Elisabeth Buchwald, “Trump’s bid to end Public Service Loan Forgiveness could mean ‘major life changes’ for some student-loan borrowers,” MarketWatch, 02/15/20]

Another Borrower Working At A Nonprofit Said They “‘Would Have To Make Serious Life Changes’”  And Would “‘Not Be Able To Save Up For A House’” If The PSLF Program Was Cancelled.

A Borrower Working As A “Legal And Judicial Director” At A Nonprofit Said They “‘Would Have To Make Serious Life Changes And Not Be Able To Save Up For A House’” If The PSLF Program Was Cancelled. “‘I feel strongly about the career I went into,’ Mai El-Sadany, a 30-year-old legal and judicial director at the Tahrir Institute For Middle East Policy, a nonprofit based in Washington D.C., said. ‘But I would have to make serious life changes and not be able to save up for a house.’ Like Gilbert, El-Sadany also took out student loans to attend law school, in her case, at Georgetown University. She owes around $62,000 after paying 53 of the 120 qualifying payments toward forgiveness, which she hopes to be granted in Sept. 2025.” [Elisabeth Buchwald, “Trump’s bid to end Public Service Loan Forgiveness could mean ‘major life changes’ for some student-loan borrowers,” MarketWatch, 02/15/20]

The Trump Administration Has Repeatedly Tried To Eliminate The Public Service Loan Forgiveness Program Entirely After Approving Just 300 Borrowers For Forgiveness From The Initial Batch Of Nearly 40,000 Applicants.

The Trump Administration’s Proposed FY18 Budget Would’ve Ended Both Public Service Loan Forgiveness and “Perkins Loans For Low-Income Students.”

On May 18, 2017 It Was Announced The Trump Administration’s Proposed FY18 Budget Would Entail “Ending Public Service Loan Forgiveness And Reforming Income-Driven Repayment Plans” As Well As “End Subsidized Loans” And “Perkins Loans For Low-Income Students.” “Besides ending public service loan forgiveness and reforming income-driven repayment plans, the ad-ministration is also proposing to end subsidized loans (for which the government pays interest while the student is in school) and Perkins loans for low-income students.” [Emma Brown, “Five key questions about Trump’s education budget,” The Washington Post, 05/18/17]

  • DeVos Characterized The Budget As A “Historic Investment In America’s Students.” “U.S. Secretary of Education Betsy DeVos maintained the budget prioritizes students. ‘This budget makes an historic investment in America’s students,’ DeVos said.” [Ben Chapman, “Trump budget proposal’s $11B education cut leaves advocates outraged,” Daily News, 05/23/17]

 

  • On June 6, 2017, Despite The Details Of Her Budget Proposal, DeVos Told The Senate “That Student Debt Is ‘Of Grave Concern.’” “Betsy DeVos said Tuesday that student debt is ‘of grave concern.’ But Democrats on the Senate Appropriations Committee slammed DeVos, claiming that her concern for student loan borrowers is not reflected in the Department of Education’s proposed budget. Released two weeks ago, it calls for a 13.5% cut to funding for the department next year and some drastic changes to the federal student aid program.” [Katie Lobosco, “Betsy DeVos: Student loan debt is ‘of grave concern,’” CNN, 06/06/17]

 

  • Even Republican Chairman Roy Blunt Told DeVos Her Proposal Was A “‘Difficult Budget Request To Defend’” And Said He Thought It Was “‘All But Impossible To Get Through This Committee.’”“‘This is a difficult budget request to defend,” Sen. Roy Blunt, R-Mo., said at a hearing held by the sub-committee on labor, health and human services. “I think it’s likely that the kinds of cuts that are proposed in this budget will not occur, so we need to fully understand your priorities and why they are your priorities.” Blunt was addressing Education Secretary Betsy DeVos, who appeared on Capitol Hill […] ‘I think will be all but impossible to get through this committee.’” [Moriah Balingit. “‘All but impossible’: Republican senator says Trump’s education cuts won’t get through Congress,” The Washington Post, 06/07/17]

 

  • Trump’s 2019 Budget Also Sought To End Public Service Loan Forgiveness And More Than Halve College Work-Study Programs. “DeVos again wants to end loan forgiveness for public-sector workers and slash more than half of the budget for college work-study programs. Those proposals failed in a Republican-led Congress and have even less of a chance with the Democrats controlling the House.” [Moriah Balingit and Danielle Douglas-Gabriel, “Trump seeks to slash $8.5 billion from Education Department budget,” The Washington Post, 03/11/19]

In 2019, The Trump Administration And Betsy DeVos Approved Less Than 300 Borrowers For Public Service Loan Forgiveness Among Nearly 40,000 Applicants.

On April 3, 2019, It Was Reported That Of 38,460 Applicants for Public Service Loan Forgiveness, ED Had Only “Approved 262 Borrowers For… Forgiveness.” “The vast majority of individuals who applied for the second chance at public service loan forgiveness that Congress created last year were again denied that benefit, according to new Education Department data. […] The Education Department said that, as of last week, it had approved 262 borrowers for loan forgiveness under the temporary program. That amounted to $10.6 million of discharged loan debt. Of the 9,820 applications that the department reviewed, 1,184 remain pending and 8,374 were rejected. The applications were most frequently rejected because borrowers had not met the requirement of making 10 years of loan payments, the department said. [Michael Stratford, “Few borrowers obtain public service loan forgiveness on second try,” Politico, 04/03/19]

As Of December 2019, The Trump Administration And Betsy DeVos Had Granted Public Service Loan Forgiveness Discharges To Just 1.2% Of The Program’s Applicants, Or 1,565 Of The 126,817 Borrowers Who Have Applied.

As Of December 2019, There Were 1,565 “Unique Borrowers With PSLF Discharges Processed” Of The 126,817 “Unique Borrowers Submitting PSLF Applications.” As of December 2019, there were 1,565 “Unique Borrowers with PSLF discharges processed” of the 126,817 “Unique Borrowers Submitting PSLF Applications.” [Public Service Loan Forgiveness Data, December 2019 Report, U.S. Department of Education, December 2019]

DeVos Faces A Lawsuit Filed By The American Federation of Teachers Over “Gross Mismanagement” Of The Public Service Loan Forgiveness Program.

On July 11, 2019, One Of The Nation’s Biggest Teachers Unions Sued Betsy DeVos For “Gross Mismanagement” Of The Public Service Loan Forgiveness Program. “The American Federation of Teachers, one of the country’s biggest teachers unions, sued Education Secretary Betsy DeVos on Thursday alleging gross mismanagement of a loan forgiveness program for public servants.” [Danielle Douglas-Gabriel, “American Federation of Teachers sues Betsy DeVos over public service loan forgiveness program,” The Washington Post, 07/11/19]

  • The Lawsuit Claims That Betsy DeVos’ Education Department “Ignored Borrower Complaints,” In Violation Of Federal Law And The Constitution. “Thursday’s lawsuit, filed in the U.S. District Court for the District of Columbia, claims the Education Department ignored borrower complaints about loan servicers providing inaccurate information and making administrative mistakes. The alleged mismanagement of the loan forgiveness program violates federal law and the Constitution, according to the lawsuit.” [Danielle Douglas-Gabriel, “American Federation of Teachers sues Betsy DeVos over public service loan forgiveness program,” The Washington Post, 07/11/19]

In 2019, DeVos Faced Criticism Over Failing To Prevent Disabled Borrowers From Having Their Social Security Checks Garnished, While Borrowers With Cancer Were Not Given Legally Approved Loan Payment Deferments.

In June 2019, DeVos Was Criticized For Not Informing Disabled Borrowers Of Their Rights To Avoid Having Their Social Security Checks Garnished.

In June 2019, Consumer Advocates Warned That Disabled Student Loan Borrowers Are Not Being Properly Informed Of Their Ability To Avoid Having Their Social Security Benefits Garnished When They Default On Their Loans. “When a borrower defaults on their federal student loan, the government can garnish their Social Security benefits, wages and tax refunds to get its money back. Borrowers have the right to mitigate or avoid these consequences by taking certain steps — including, if they’re disabled, filing for a disability discharge. But borrower advocates have complained for years that a lack of information from the government and the companies and nonprofit organizations it hires to manage the student-loan program have meant struggling borrowers face challenges accessing the lifelines to which they’re entitled.” [Jillian Berman, “Student-loan borrowers with disabilities will be reimbursed after their Social Security checks were needlessly garnished,” MarketWatch, 06/17/19]

That Same Month, DeVos Also Faced Criticism For Not Facilitating Deferments For Cancer Patients, Even Though President Trump Had Signed The Provision Into Law Nine Months Prior.

Also In June 2019, It Was Reported That The Education Department Has Failed To Provide Student Loan Servicers An Application For Cancer Deferment Nine Months After “President Donald Trump Signed Into Law A Bill Allowing People With Cancer To Press Pause On Their Federal Student Loan Payments.” “Last September, President Donald Trump signed into law a bill allowing people with cancer to press pause on their federal student loan payments. More than nine months after the law took effect, borrowers still can’t access the cancer deferment. At issue seems to be this: The Department of Education has yet to provide the companies that administer its federal student loan programs with an official application for cancer patients to apply.” [Annie Nova, “Student loan borrowers with cancer are supposed to get a break from their bills. That’s not happening,” CNBC, 06/29/19]

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