As previously scheduled, the full House Appropriations Committee will mark up this morning its first FY2020 bill, the Labor-HHS-Education measure. The report accompanying the bill was released yesterday. Unlike the past several years, when it was one of the last, if not the last, spending measures to move, this year’s Labor-HHS-Education legislation will be the first taken up by the committee.
While we will have more details after reviewing the report, we wanted to note the following about the Public Service Loan Forgiveness program:
The Committee recommendation includes $350,000,000 for the Federal Direct Student Loan Program Account program (also known as Temporary Extended Public Service Loan Forgiveness or TEPSLF). Congress created the Public Service Loan Forgiveness (PSLF) program in 2007 to provide relief to borrowers pursuing careers in public service. After making 120 qualifying payments, the equivalent of ten years, borrowers first became eligible for forgiveness under the program in 2017. While 53,749 borrowers believed they qualified for forgiveness and submitted applications, as of December 2018, only 338 borrowers have had their discharges processed by the Department.
TEPSLF was established to address the administrative failures of the Department and student loan servicers, who did not provide accurate information to borrowers seeking to qualify under the PSLF program. This account provides funding for loan forgiveness for borrowers who were led to believe they qualified for PSLF by their loan servicers but were denied forgiveness. Unfortunately, the Department has failed to effectively administer this program as well. According to recent data from the Department, over 38,000 borrowers applied for relief under TEPSLF, but only 262 applications were approved.
The Committee is also concerned with the Department’s reversal of employment certifications under the program. The Committee directs the Department to develop comprehensive guidance and instructions regarding PSLF and require loan servicers in the current servicing environment to provide consistent and accurate information to borrowers. Furthermore, the Committee directs the Department to refrain from reversing qualifying employment determinations, except for administrative error, and further directs the Department to calculate multiple payments made to a loan servicer, within 15 days of the scheduled payment due date, that combine to result in the payment amount total required for the payment period, to be counted as a qualifying payment toward the 120 payments required by the program.
The Committee directs the Secretary to update the PSLF Report on FSA’s Data Center on a monthly basis within 30 days after enactment of this Act. The Committee also directs the Secretary to include updates for TEPSLF within the updated reports.
To help improve implementation of the program, the Committee recommendation includes new bill language to ease a bureaucratic hurdle that requires borrower’s most recent monthly payments and the monthly payments made a year before they applied be greater than what their monthly payment would have been under an income-driven repayment plan. The bill also requires the Secretary to increase awareness of the program and inform all borrowers repaying their loans under PSLF and in the incorrect repayment program about TEPSLF requirements.
The markup today represents the beginning of the legislative process on the Labor-HHS-Education measure.