Handout photo of Maryland Attorney General Brian Frosh.
ANNAPOLIS (Sept. 18, 2019)—Maryland Attorney General Brian Frosh and a coalition of state lawmakers have asked U.S. Education Secretary Betsy DeVos why so many people are being denied by the federal Public Service Loan Forgiveness program.
The program, which was established by Congress in 2007, allows borrowers to have their student loan debt forgiven if they have worked for a qualifying public service organization for at least 10 years with 120 payments, according to the Federal Student Aid website (studentaid.ed.gov/sa/sites/default/files/public-service-loan-forgiveness-employment-certification-borrower-letter.pdf).
Qualifying employers include federal, state or local government organizations, 501(c)(3) organizations and nonprofit organizations that provide a qualifying public service but are not tax-exempt, according to the Education Department.
Borrowers first became eligible for forgiveness in September 2017, according to the U.S. Government Accountability Office. But even though 19,321 people had applied by April of last year, only 55 had been granted loan forgiveness, the office reported.
Congress funded the Temporary Expanded Public Service Loan Forgiveness program last year to help borrowers who had issues being accepted due to being in a non-qualifying payment plan, according to the government's office of Federal Student Aid. (studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service/temporary-expanded-public-service-loan-forgiveness). A new Government Accountability Office report this month found, however, that 99% of the 54,184 applications under the expanded program had been denied.
Now, Maryland officials and lawmakers are asking DeVos for answers.
Frosh joined a coalition of attorneys general in sending a letter to DeVos in late August urging the Education Department to provide data to help states address issues with the program, according to a news release. A similar coalition asked the department for data last year, but the response provided "incomplete" information.
"Thousands of Marylanders have committed to 10 years of service to their communities, because they relied upon the promise of (Public Service Loan Forgiveness)," Frosh said in a statement. "Instead of honoring that promise, Secretary DeVos has met them with confusing guidelines, lack of information and, ultimately, denial of loan forgiveness."
Raquel Coombs, a spokeswoman for Frosh, told Capital News Service that the number of people approved for the loan forgiveness program is a "woefully small number." The data provided to the attorneys general by the Education Department indicated that 864 of 76,002 people nationwide who applied to the program since it began were accepted, according to the release.
Delegate Lesley Lopez, D-Montgomery, led a coalition of 43 Maryland state senators and delegates in sending a letter to DeVos also asking for information about the implementation of the loan forgiveness program. The lawmakers discuss in the letter the "growing body of evidence documenting that the Department has mishandled this program."
"Thousands of Marylanders will likely not be able to receive the debt relief they were promised
and will face financial hardship if this mishandling continues," the letter adds.
Lopez told Capital News Service that student loan debt is something she has been thinking about for a "long time." She said that after hearing a National Institutes of Health employee speak about being denied by the loan forgiveness program, she decided to "dig into it." It eventually became "really clear" that the program "wasn't being managed in the way it was originally designed," Lopez said.
"Eligibility was intended to be pretty expansive," Lopez said.
Now, it is "nebulous … it means nothing," she added.
The Montgomery County delegate said the current conversation is "just the starting point of a whole portfolio of bills" that will address student loan debt in the next General Assembly session.
Angela Morabito, the press secretary for the U.S. Education Department, said in a written statement that the department "has been faithfully administering the complex program designed by Congress."
"Complexities in the (Public Service Loan Forgiveness) program include restrictions on the types of eligible loans and no authority to require borrowers to annually report their participation in the program," Morabito added. "The framework designed by Congress is confusing for borrowers, and we are working to make it as straightforward as the rules allow."
Sunshine Brosi, an associate professor in the biology department at Frostburg State University, said she found out about the program when it launched in 2007. She said she was told she was "on track" for forgiveness. She ended up being denied.
Brosi said she was denied because she was in the wrong repayment plan. Later, the reasoning given to her was that she was working with the wrong kind of service provider. She said she thinks of these reasons as "little excuses," and feels that she has been "misled" on the qualifications of the program.
"How can 99% of people have done something wrong?" Brosi asked.
Brosi said she turned down a job with a higher salary so she could stay in a qualifying position for the forgiveness program, and even chose her profession originally because of it.
She added, "I definitely assumed that my loans would be paid off by this point … People make decisions thinking, 'I'm going to have this thing paid off.' "
Shahryar Rizvi, a Burtonsville, Maryland, resident and federal employee of 15 years, told Capital News Service that while he has not been denied for loan forgiveness, he has had his own frustrations with what he described as a "horribly administered program." He would not disclose his employer.
Rizvi, 38, said the problem "first and foremost would be the communication" from the Education Department regarding the qualifications needed to be accepted. He has spoken about the issues with the program at town halls because he has been "burned by it so bad." The application process, he said, is a "formality and unnecessary hoop."
After originally being in the wrong repayment plan, Rizvi said he is now on track for forgiveness and is three years into qualifying payments. Because of the strict requirements, Rizvi said, he has to stay in his current federal job in order to get his debt forgiven.
Risvi added that while he does not necessarily want to leave his job, he wants "the freedom to search and leave." He said he does not have that freedom.