Senate Democrats, Led By Sens. Schumer, Warren, Murray, And Kaine, Demand Sec. DeVos Take Immediate Action To Fix Dept. Of Ed’s Gross Mismanagement Of Temporary Expanded Public Service Loan Forgiveness Program After GAO Found The Admin Rejected 99 Percent Of TEPSLF Applicants And Used Only 4 Percent Of Appropriated Funds

October 8, 2019

In New Letter To Secretary Betsy DeVos, Senate Dems. Express Outrage And Demand Corrective Action Following Government Accountability Office (GAO) Report Detailing Severe Flaws In Dept. Of Education’s Implementation Of Public Service Loan Forgiveness Program (TEPSLF), Including An Inaccessible, Needlessly Complicated Application Process And Other Unnecessary Barriers To Applicants Seeking Loan Forgiveness

Senate Democrats Highlight Deep Consequences Of Dept. Of Education’s Mismanagement, Including Disturbing Rejection Rate Of 99% And Use Of Only 4% Of Funds Appropriated To Help Borrowers 

Senate Dems To Secretary DeVos: Dept. Of Education’s Faulty Implementation Of TEPSLF Hurts Borrowers And Corrective Action Plan Is Required

Washington, D.C.— Senate Democrats, led by Senate Democratic Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), Health, Education, Labor, and Pensions Committee Ranking Member Patty Murray (D-WA), and Senator Tim Kaine (D-VA), today sent a letter to Secretary of Education Betsy DeVos demanding that the Department of Education take immediate action to rectify serious flaws in their 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 utilized four percent of funds appropriated by Congress to aid borrowers, and involves a needlessly complicated application process that is a significant barrier to borrowers seeking loan forgiveness.

In the letter, the Senators note that although Congress created the TEPSLF program in 2018 to reduce barriers to student loan forgiveness for Americans who pursue careers in public service, and appropriated $700 million to increase the number of Americans eligible for relief, GAO determined that under the direction of President Trump’s Department of Education, the program has had a rejection rate of 99 percent, providing relief to only 656 of 54,184 applicants through May 2019. GAO further found that the Department’s application process is needlessly complex, despite Congress’s requirement that the Department create a “simple method” for application. For example, the Department requires that TEPLSF applicants must first apply to and be rejected from the regular Public Service Loan Forgiveness program even if an applicant knows they do not meet that program’s requirements. This has resulted in 71% of denials.

Senate Democrats 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 TEPLSF 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 TEPLSF program administration and improve approval rates for borrowers that apply for relief. Senate Democrats demand a response to these requests no later than October 30, 2019.

The letter is signed by Senate Democratic Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), Health, Education, Labor, and Pensions Committee Ranking Member Patty Murray (D-WA), Senator Tim Kaine (D-VA), Senator Sherrod Brown (D-OH), Senator Patrick Leahy (D-VT), Senator Ed Markey (D-MA), Senator Tammy Duckworth (D-IL), Senator Chris Van Hollen (D-MD), Senator Doug Jones (D-AL), Senator Jeff Merkley (D-OR), Senator Jack Reed (D-RI), Senator Chris Murphy (D-CT), Senator Ben Cardin (D-MD), Senator Tammy Baldwin (D-WI), Senator Debbie Stabenow (D-MI), Senator Amy Klobuchar (D-MN), Senator Maggie Hassan (D-NH), Senator Kamala Harris (D-CA), Senator Cory Booker (D-NJ), Senator Tina Smith (D-MN), Senator Bernie Sanders (D-VT), Senator Mazie Hirono (D-HI), Senator Jacky Rosen (D-NV), Senator Bob Menendez (D-NJ), and Senator Richard Blumenthal (D-CT).

Senate Democrats’ 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).[1] 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 support of the Department, but instead 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.[2] In response, Congress created the TEPSLF program and appropriated $700 million in the last two fiscal years to temporarily expand PSLF for borrowers who had met 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.[3]

In the Consolidated Appropriations Act, 2018, Congress required the Department to create a “simple method” for borrowers to apply for TEPSLF.[4] 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.[5] GAO noted that this bifurcated process “is not aligned with Education’s strategic goal to improve customer service to borrowers.”[6]

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.[7] 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. Since Congress created TEPSLF in 2018, it has set aside $4.6 million for the Department to conduct outreach on both PSLF and TEPSLF to help inform borrowers 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 the Department has refused to provide a timeline by when this communication to all outstanding Direct Loan borrowers will occur; it has instead suggested “targeted” emails without any timeline.[8]

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 told GAO that it had “no specific plans to do so” at the time.[9] It also remains unclear if the Department has conducted outreach to all outstanding 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 failing to notify borrowers of their options for relief, but the Department still refuses to act.[10]

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. The Department recently testified before Congress that many changes will not occur until 2020.[11] These delays are unacceptable. Borrowers deserve proactive support and a path to relief as soon as possible. The GAO made four recommendations to the Department that, if implemented, would help borrowers obtain the debt 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,[12] 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;

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

3. A corrective action plan for all concerns raised about TEPSLF administration to-date, as requested by Members of Congress on June 21, 2018;[13] and

4.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.

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

Sincerely,

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