More than 20 Democratic senators called on the Consumer Financial Protection Bureau (CFPB) to investigate a loan servicer’s handling of a loan forgiveness program for public service workers.
The Pennsylvania Higher Education Assistance Agency (PHEAA) is one of several institutions tasked with handling the Public Service Loan Forgiveness (PSLF) Program, which, according to recent reports, has denied 99 percent of applicants.
"For several years now, government watchdogs have repeatedly found that PHEAA's missteps, errors, and mismanagement of the PSLF program caused public service workers to be denied the loan forgiveness that they had earned," the 23 senators wrote.
In a 2017 report by the CFPB’s student loan ombudsman, the office said PHEAA’s “flawed payment processing” and paperwork errors had contributed to loan forgiveness denials, while a 2018 Government Accountability Office report blamed PHEAA’s failure to “properly account for qualifying payments and reliance on inaccurate information.”
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“Tens of thousands of dedicated public service workers and their families are paying the price for PHEAA’s incompetence and the CFPB’s failure to act,” the letter states. “These women and men have served their communities for years, and relied on the government’s promise of loan forgiveness to make important life decisions about where to work, when to start a family, and when to buy their first home. They deserve better."