Department of Education Needs to Provide Guidance on PSLF Eligibility

FOR IMMEDIATE RELEASE:
April 7, 2017
Contact: Sarah Schultz, Sarah.Schultz@YoungInvincibles.org, 202-734-6510

[Washington] – Recently, the Department of Education stated in a legal filing that borrowers may not be able to rely on a determination made by their student loan servicer regarding their eligibility for the Public Service Loan Forgiveness (PSLF) program. Under PSLF, workers in public service jobs can qualify for student loan forgiveness after making 120 qualifying payments on their loans.

While relevant statutes make clear that certain employers, such as government and 501(c)3 jobs, automatically qualify, the eligibility of employment at other non-profit organizations remains unclear. A pending legal case focuses on nonprofit organizations not specified in statute that servicers had previously said qualified for the program. As the New York Times recently reported, the Department has yet to provide any further guidance to workers or indicate if there will be any type of appeal process for those who have had their eligible status revoked.

Borrowers rely on the representations made by servicers to manage their loan payments, and eroding their ability to trust what they are being told, regardless of their place of employment, could have serious negative consequences.

Reid Setzer, Deputy Director of Policy and Legislative Affairs for Young Invincibles, released the following comment in response:

“The Department’s lack of clarity regarding the Public Service Loan Forgiveness program is putting the financial security of thousands of young adults across the country at risk. These workers have relied on their servicer’s determination that their employment qualifies them for forgiveness under the PSLF program, and have planned their finances and career decisions accordingly. The Department must provide clear guidance on which employers qualify workers for loan forgiveness and honor previous determinations that borrowers relied upon.”

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