Congressman Tim Ryan Condemns Department of Education Wavering on Loan Forgiveness Program
Washington, DC – Congressman Tim Ryan released the following statement in response to the Department of Education’s wavering on honoring its commitments to forgive student loan debt after ten years of service under their Public Service Loan Forgiveness (PSLF) program. This program was created under the College Cost Reduction Act of 2007, which was signed into law by President George W. Bush. Ryan voted in favor of this legislation.
“Hundreds of thousands of Americans have made life altering decisions to serve in various professional capacities as a result of assurances from the Department of Education that, under their Public Service Loan Forgiveness program, debt remaining after ten years of public service work would be cleared. Dangling uncertainty about the Department’s commitment to upholding its end of the deal is fundamentally unfair to those already participating in this program, and may damage the underlying goal of the program in the first place: to get professionals to pursue careers as teachers, public defenders, social workers, and doctors. These jobs provide invaluable services to their communities, but typically offer lower pay and far fewer benefits making it hard to recruit and retain talent. Letting this program fall apart could have devastating consequences across the entire country, particularly to those men and women who have made decisions based on promises of the U.S. Government. The Department of Education and Secretary DeVos must honor these commitments,” said Congressman Ryan.
In April, Congressman Tim Ryan joined colleagues on a letter urging Secretary DeVos to review the Department of Education’s implementation of the program to ensure that it is consistent, transparent and impartial for all student-loan borrowers employed in public service. The text of that letter can be found below:
April 24, 2017
The Honorable Betsy DeVos
Secretary of Education
U.S. Department of Education
400 Maryland Avenue, SW
Washington, DC 20202
Dear Secretary DeVos:
We write to express our serious concern over the U.S. Department of Education's ("Department") failure to honor its assurances to participants in the Public Service Loan Forgiveness ("PSLF") program, with respect to certain employer certifications. We urge you to review the Department’s implementation of PSLF for consistency, transparency, and fairness, in order to restore trust in the program for those who have chosen to pursue public service.
Careers in public service – which typically offer lower pay and fewer benefits than those in the private sector – greatly benefit underserved, urban, rural, and tribal communities. To encourage more professionals to pursue public service careers, Congress included the PSLF program within the bipartisan College Cost Reduction and Access Act (“CCRAA”) of 2007. Under PSLF, public servants across the country who work in education, public health, the military and many other sectors dedicate at least ten years of their lives to helping their communities, and in return, their student loan debt is forgiven. Many of these individuals take out loans, complete their education, and enter careers in public service partially because they have been assured that their debt will be relieved.
Student loan borrowers who meet their loan forgiveness requirements rightfully expect federal agencies to follow through on their end of the bargain. However, with increasing frequency over the last year, the Department has suggested that PSLF participants may not be able to rely on the agency’s prior assurances that participants’ employment qualifies for loan forgiveness. Instead, the Department has taken the position that it is not bound by previously issued employment certifications. This is irresponsible. PSLF participants – especially those who have taken proactive steps to certify their employment and were told that their place of employment qualified for the program– should be rewarded for their efforts in helping their communities and improving our country. Instead, they are having the rug pulled out from under them.
The intention of the certification process was to provide aspiring participants with clear front-end assurance that they will receive the promised forgiveness after ten years of public service. It is unacceptable for the Department to revoke or retroactively deny employer certifications for PSLF participants after issuing such assurances. The Department must honor its commitment to borrowers by recognizing approved Employment Certification Forms. To do otherwise completely undermines the financial calculus that individuals made when choosing to participate in the program and leaves them stranded with an unexpected and undue debt burden.
Moreover, we urge the Department to carefully consider its employment certification decisions in light of the CCRAA. In passing this law, it was Congress’ intent to promote public service and provide public service employers with additional recruitment tools. A great deal of confusion persists for PSLF participants employed by non-profit organizations that provide a public service but are not categorized under Section 501(c)(3) of the Internal Revenue Code. This uncertainty threatens to erode trust in PSLF as a program, discourage potential participants from entering public service, and undermine recruitment efforts by employers serving at-risk communities.
Much of the present confusion regarding PSLF could be prevented if the Department was more transparent in its operation and implementation of the program. For example, if a borrower’s Employment Certification Form is denied by the Department, the denial should clearly state the reason why the employer is not eligible under the PSLF program. The Department should create a formal appeals process and disclose that process at the time of certification. Information should include how the borrower may work with his or her employer to provide the documentation necessary for PSLF qualification. In addition, the Department should take appropriate steps to inform the borrower of other loan repayment options and loan forgiveness programs available to the borrower. Finally, the Department should move forward with making the PSLF employment certification process fully accessible electronically, including the ability to electronically sign and file forms.
By adopting the policies outlined above, the Department would provide PSLF applicants more confidence to pursue public service careers. This coming September, less than six months from today, marks the first opportunity for eligible borrowers to claim forgiveness after meeting their obligations for ten years. As of last year, over 550,000 borrowers have an approved Employment Certification Form. Given the urgency of this time frame, and the breadth of the program’s reach, we respectfully join our Senate colleagues in requesting your response as expeditiously as possible. Thank you for your attention to this matter.