Student loan forgiveness; a promise broken
On Sept. 27, 2007, President George W. Bush was downright gleeful about the signing of a bipartisan bill intended to make college more affordable and accessible.
“I have the honor of signing a bill that will help millions of low-income Americans earn a college degree. I'm really looking forward to signing this bill. I love the fact that this country is dedicated to helping people who want to realize a dream,” said the Republican president.
A freshman Connecticut congressman, Democrat Rep. Joe Courtney, had used his first speech on the House floor to push for the “College Cost Reduction and Access Act of 2007” that Bush was signing.
Contained in the bill was the Public Service Loan Forgiveness program. The program’s concept seemed simple enough. Borrowers who faithfully made at least their minimum payments on their student loans for 10 years — these things are like mortgages — while working in a qualifying public service job would have the remainder of their federal direct student loans forgiven.
Public service jobs covered under the law included full-time employment in emergency management, government, military service, public safety, law enforcement, public health, public education, social work, childcare and public library sciences, among others.
But it hasn’t worked out so well for those counting on it. The Department of Education, using a private servicer to assess loan forgiveness applications, has denied relief to more than 99 percent of applicants since the first borrowers became eligible in October 2017. The latest statistics I could find showed that of the 99,962 people who applied, 845 were granted loan forgiveness.
No wonder people lose all faith in politicians promising wonderful things.
Applications are being rejected because the borrowing allegedly did not all come from a federal loan program authorized under the act, or because borrowers did not use a particular kind of repayment plan, and other technicalities.
The American Federation of Teachers, with several named plaintiffs who were denied loan forgiveness, is suing the Department of Education and Education Secretary Elisabeth Devos. The lawsuit claims the administrators of the program failed to maintain accurate records, did not explain the reasons for denials, and had steered borrowers into repayment plans that were later used as justification for denying the promised forgiveness.
The plaintiffs contend they made career and financial decisions based on the expectation of loan forgiveness, only to see it denied.
On Nov. 22, Connecticut Attorney General William Tong announced the state was joining 21 state attorneys in filing a friend of the court brief in support of the plaintiffs.
Last year, Courtney joined 150 members of the House and Senate in signing a letter to DeVos demanding an explanation as to why so few applicants were being approved. Her defense was that the current administration got stuck with trying to administer a complicated program.
A dozen Democratic senators have offered to simplify things. They would amend the bill to greatly expand the pool of borrowers who would be judged eligible to have their debt canceled. While there are more than a dozen ways to repay student loans, only one of the four income-based programs have been judged as eligible. Under the Democratic bill, all federal repayment plans would be eligible, an assumption many folks were already operating on.
Also, the Education Department would be required to provide better information about the program. Going forward, half of an eligible college graduate’s student loans could be forgiven after five years, the other half after 10.
The Republican majority in the Senate has blocked the proposal, for while they don’t mind running up the federal debt to provide tax cuts for billionaires, Senate Republicans are not so keen on doing so for public servants.
Where is George W. Bush and his compassionate conservatism when you need them?
Paul Choiniere is the editorial page editor.
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