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Senator Gillibrand Looking to Make Changes to the Public Service Loan Forgiveness Program

by Carol Elizabeth Owens
carolelizabeth@minorityreporter.net

U. S. Senator for New York Kirsten Gillibrand, official photo, 116th Congress.

U.S. Senator Kirsten Gillibrand issued a report detailing what she says are shortcomings of the Public Service Loan Forgiveness Program (PSLF) program and how it has failed to bring relief to New York borrowers pursuing public service careers.

The program was created to alleviate student loan debt for individuals committed to public service careers for 10 years or more.

According to the report released Oct. 14, 2021, the PSLF program has been plagued by administrative errors and eligibility restrictions that have prevented many Americans from receiving the forgiveness they were promised and have earned.

As it turns out, only approximately 1% of all public servants who have applied for the program have received loan forgiveness due to flawed implementation and confusing PSLF program requirements throughout the entirety of the program’s existence.

Problems with administering the PLSF program have had a direct impact on New Yorkers. For example, only 1.2% of NY borrowers have had their loans forgiven, and NY borrowers account for 1 in every 14 PSLF program participants denied forgiveness.

The financial and economic impacts of this situation are significant – PSLF participants in New York still owe more than $8 billion, representing nearly 10% of all outstanding federal student debt in the New York state. 

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 Federal Family Education Loan (“FFEL”) program loans and would provide a partial forgiveness benefit after five years.

“Since its inception, the Public Service Loan Forgiveness Program has failed to help ease the student debt burden for our national 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. Following through on this promise is a top priority.”

Gillibrand cites this priority as the reason for issuing the PSLF program report, as well as for her pursuit for passage of the ‘What You Can Do for Your Country Act’, which has been proposed, but has not yet moved through the full legislative process.

“It’s time for Congress to create a fairer and simpler process for public servants seeking loan forgiveness and send a message to future generations that public service is a viable and valued career path for anyone,” Senator Gillibrand said.

According to information supplied by Gillibrand, more than 12,000 New York borrowers would have half of their loans forgiven under the What You Can Do for Your Country Act’.

Senator Gillibrand’s complete PLSF program report can be found here.