Government watchdog finds expanded student loan forgiveness program still rejecting most applicants

Government watchdog finds expanded student loan forgiveness program still rejecting most applicants
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The vast majority of applicants to a program designed to forgive student loans for public servants are still being denied, despite an effort from Congress to expand the program, according to a new government watchdog report released Thursday.

The Government Accountability Office (GAO) found that just 661 out of 54,184 requests, or 1 percent, for the new Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program were accepted in its first year, from May 2018 to May 2019.

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The Department of Education spent only $27 million of the $700 million Congress set aside for the expansion.

"We were disheartened," Melissa Emrey-Arras, who led the GAO's review, told NPR Thursday.

"I think we were discouraged. I mean, the hope is that you have this temporary expanded process, and you want it to help a lot of people. And you don't want borrowers to be confused about the eligibility criteria and to face a high denial rate. And yet, that's what we found."

Congress created the expansion program to the Public Service Loan Forgiveness (PSLF) last year after an outcry that the system's requirements were so rigid and poorly communicated that lawmakers needed to step in.

The expansion program also came in response to a report from the GAO last year finding a PSLF rejection rate of 99 percent.

PSLF was created in 2007 to forgive the remainder of federal student loan debt for graduates who pay loans for 10 years and work in a qualifying job for the government or a nonprofit.

The program has been under intense scrutiny since last year's GAO report, and this summer the American Federation of Teachers filed a lawsuit over its failure.

This year's GAO report recommends that the Education Department streamline the TEPSLF and PSLF application process and improve transparency with borrowers about the program's process and requirements.

The American Federation of Teachers slammed the Education Department on the report's findings Thursday, re-upping their own lawsuit.

"Once again, Betsy DeVosElizabeth (Betsy) Dee DeVosTrump awards Jon Voight, others National Medal of Arts Education Department releases wage, debt data for specific college majors DeVos forgives 1,500 student loans amid federal lawsuit MORE has refused to do her job when it comes to the millions of American teachers, nurses, firefighters and public employees promised loan forgiveness," the group's president, Randi Weingarten, said in a statement. "DeVos and the Trump administration have the capacity and authority to fix Public Service Loan Forgiveness to help these workers—just as they just did for disabled veterans—but choose instead to stymie it."

"It’s because of loan forgiveness debacles like this that we’re suing DeVos for her refusal to side with borrowers."