Hassan, Colleagues Call for Immediate Action Following Secretary DeVos’ Mismanagement Of Loan Forgiveness Program that Hassan Advocated for to Support Teachers, First Responders, Service Members, and Other Public Servants

WASHINGTON – Today, Senator Maggie Hassan (D-NH) joined her colleagues in sending a letter to Secretary of Education Betsy DeVos demanding that the Department of Education immediately rectify the serious flaws in its management of the Temporary Expanded Public Service Loan Forgiveness Program (TEPSLF), after the Government Accountability Office (GAO) found that the program rejected 99 percent of TEPSLF applicants, only used four percent of funds appropriated by Congress to aid borrowers, and created a needlessly complicated application process that is a significant barrier to borrowers seeking loan forgiveness.

“Public servants such as teachers, first responders, nurses, and members of our military deserve the highest quality customer service, but the report’s findings show us they are being unfairly denied the debt relief that Congress made available,” wrote the Senators. “The Trump Administration’s flawed implementation of loan forgiveness programs, resistance to recommendations to improve its processes, failure to properly hold student loan servicers and debt collectors accountable, and recent interference with state and federal law enforcement agencies, has combined to create a disaster for public servants applying for loan forgiveness.”

Senator Hassan advocated for the creation of the new TEPSLF program in the 2018 appropriations package to help fix the broken Public Service Loan Forgiveness program to reduce barriers to student loan forgiveness for Americans who pursue careers in education, public health, the military, and other public service work. In addition to the rate of rejection and lack of use of appropriated funds, GAO found that the Department of Education’s TEPSLF application process is needlessly complex, despite Congress’s requirement that the Department create a “simple method” for application.

Senator Hassan and colleagues stress that these abysmal outcomes are contrary to Congress’s intent, and request additional information regarding the Department’s administration of the program, including a specific and detailed timeline and written description of how the Department of Education intends to comply with GAO’s recommendations to improve the program’s administration; remedial measures the Department will take if deadlines to improve TEPSLF administration are not met; a corrective action plan for all concerns raised about TEPSLF administration to-date, as requested by Members of Congress on June 21, 2018; and a description of any other actions the Department will take to improve TEPSLF program administration and improve approval rates for borrowers that apply for relief.

The letter sent today is part of Senator Hassan’s continued oversight over the Department of Education for its flawed implementation of the public service loan forgiveness programs. Last year, Senator Hassan and her colleagues requested that Education Secretary Betsy DeVos turn over more information—and swiftly act to fix— the Department’s flawed handling of the Public Service Loan Forgiveness program. Senator Hassan also joined Senator Jeanne Shaheen (D-NH) in introducing legislation to overhaul the Public Service Loan Forgiveness Program.

Senator Hassan’s letter to Secretary of Education Betsy DeVos can be found here and below:

October  8, 2019

The Honorable Betsy DeVos

Secretary of Education

U.S. Department of Education

400 Maryland Avenue, S.W.

Washington, D.C. 20202

Dear Secretary DeVos:

We write to express our extreme concern with the U.S. Department of Education’s (“Department”) management of the Temporary Expanded Public Service Loan Forgiveness Program (TEPSLF) that was recently audited by the Government Accountability Office (GAO). In a new report, GAO found that the Department has created unnecessary barriers to applying for loan forgiveness and has failed to ensure that information about TEPSLF is made readily available to borrowers. Public servants such as teachers, first responders, nurses, and members of our military deserve the highest quality customer service, but the report’s findings show us they are being unfairly denied the debt relief that Congress made available.

GAO’s report on TEPSLF is not the first indication of flaws in the Department’s administration of debt relief programs. After borrowers first became eligible for Public Service Loan Forgiveness (PSLF) in late 2017, reports began to surface about borrowers who were shut out of forgiveness due to inadvertently enrolling into the wrong loan repayment plan, often due to misinformation provided by their loan servicer. In response, Congress created the TEPSLF program and appropriated $700 million to temporarily expand PSLF for borrowers who had met all of their service requirements but who were in graduated or extended loan repayment plans. Unfortunately, very little of this relief has reached borrowers. GAO found that the Department denied 99 percent of applicants to TEPSLF through May 2019. As a result, the Department has released only 4 percent of the funding that was provided to help borrowers.

In the Consolidated Appropriations Act, 2018, Congress required the Department to create a “simple method” for borrowers to apply for TEPSLF. Congress also noted “significant concern from borrowers over the Department's consistency and reliability in administering the Public Service Loan Forgiveness [PSLF] program” in the accompanying Committee Report. Instead of following Congressional intent and making a simple method of application available, the Department made the TEPSLF process needlessly difficult. GAO found that the Department’s unnecessary requirement that a TEPSLF applicant first apply to be rejected for PSLF, before applying again, has resulted in 71 percent of denials. GAO noted that this bifurcated process “is not aligned with Education’s strategic goal to improve customer service to borrowers.”

GAO’s review of TEPSLF revealed additional problems beyond the application process: when borrowers are denied, the Department does not fully inform them on how to contest the decision, and the Department’s outreach to borrowers about the program and their potential eligibility is limited and inadequate. The Department’s response to GAO’s findings is also troubling, as it seeks to shift blame away from flawed implementation and, while concurring with GAO’s recommendations, fails to provide clear and detailed indications of how the Department will implement these recommendations and their timeline for doing so.

More than a year ago, Senate Democrats called for the Department to change its unnecessarily confusing TEPSLF application and replace it with a streamlined process. This letter also asked for a corrective action plan to deal with the extreme denial rates under TEPSLF that were already apparent, including proactive identification and outreach to borrowers for whom the temporary expansion was specifically designed. The Department did not comply with any of these requests.

The Department cannot claim it has lacked resources to implement TEPSLF. When Congress created TEPSLF in 2018, it also set aside $4.6 million for the Department to conduct outreach on both PSLF and TEPSLF to help inform borrower of their options. Again, however, the Department failed to comply with Congressional intent in this area. The law requires the Department to “communicate to all Direct Loan borrowers the full requirements” for PSLF, but it has refused to provide a timeline by when this communication to all borrowers will occur; it has instead suggested “targeted” emails without any timeline.

GAO’s report found that none of the Department’s contracted student loan servicers (except for the TEPSLF contractor) provide information on TEPSLF. The Department has also failed to integrate TEPSLF into its PSLF Help Tool and said that it has “no specific plans to do so.” It remains unclear if the Department has conducted outreach to all borrowers who have expressed an interest in PSLF but who are in the incorrect repayment plan (the intended population who may benefit from the temporary expansion) to notify them of their options. GAO has previously criticized the Department for failure to notify borrowers of their options for relief, but the Department still refuses to act.

The Department has repeatedly expressed that it plans to delay PSLF and TEPSLF improvements until it can complete implementation of the “Next Gen” contracting process. These delays are unacceptable. Borrowers deserve a path to relief as soon as possible. The GAO made four recommendations to the Department that, if implemented, would help borrowers obtain the relief Congress intended by creating TEPSLF.

The Trump Administration’s flawed implementation of loan forgiveness programs, resistance to recommendations to improve its processes, failure to properly hold student loan servicers and debt collectors accountable, and recent interference with state and federal law enforcement agencies, has combined to create a disaster for public servants applying for loan forgiveness. The millions of public servants who pursued careers in education, public health, the military, and other public service work deserve better. Accordingly, we request that you provide:

1. A specific and detailed timeline and written description of how the Department intends to comply with GAO’s recommendations to improve TEPSLF administration;

1. Remedial measures the Department will take if deadlines to improve TEPSLF administration are not met;

1. A corrective action plan for all concerns raised about TEPLSF administration to-date, as requested by Members of Congress on June 21, 2018; and

1. A description of any other actions the Department will take to improve TEPLSF program administration and improve approval rates for borrowers that apply for relief;

We ask for a response to these requests to improve administration of the TEPSLF program no later than October 30, 2019. Thank you for your attention to this important matter.

###