California

Thousands of California public sector workers sought student debt relief. Just 74 qualified

Student debt is on the rise in the U.S.

The student lending market has grown to more than $1 trillion in outstanding debt. By using data and expert interviews, the Consumer Financial Protection Bureau gives context to consumers considering taking on student loans.
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The student lending market has grown to more than $1 trillion in outstanding debt. By using data and expert interviews, the Consumer Financial Protection Bureau gives context to consumers considering taking on student loans.

Less than one percent of Californians who applied to have their federal student debt canceled under the Public Service Loan Forgiveness program have received relief, according to new data the Department of Education provided to McClatchy.

As of late April, the most recent date the data is available, 6,184 borrowers listing California as their state of residence submitted 7,906 applications for Public Service Loan Forgiveness (PSLF), a program created by Congress in 2007.

Seventy-four applications were approved, while 6,380 were denied and 1,452 were still pending.

The loan forgiveness program aims to help people who go into traditionally lower-paying public sector work – including jobs with the government or certain types of non-profit organizations – by allowing them to cancel their federal student debt after ten years of on-time repayments.

But to qualify, students must meet a number of strict standards, and many do no realize they are not eligible until it is too late.

Nationwide, just 864 of the 76,002 Americans who applied for the program have received loan forgiveness.

Congress tried to address that problem last year by creating the Temporary Expanded Public Service Loan Forgiveness program for many of those initially denied regular public service loan forgiveness. But the vast majority of applicants have been rejected from that program, as well.

According to Department of Education data, 442 of 12,429 applicants to the Temporary Expanded PSLF program have been approved.

Thirty-one Californians have been approved for the Temporary Expanded loan forgiveness as of March 31, out of 1,247. Another 119 were pending, and the rest were denied.

California Attorney General Xavier Becerra and a coalition of 12 other state attorneys general sent a letter to Education Secretary Betsy DeVos on Aug. 28 demanding more data on the loan forgiveness programs as well as information on how the department is working to help more students qualify.

DeVos is “withholding information to explain why the program is failing under her watch,” Becerra complained in a statement.

Among other things, the attorney general’s office would like more information on the companies servicing the loans.

The Department of Education, however, is pointing the finger at Congress and the way they wrote the original law.

“The framework designed by Congress is confusing for borrowers, and we are working to make it as straightforward as the rules allow,” Press Secretary Angela Morabito said in a statement provided to McClatchy. “The Department created the PSLF Help Tool, which helps borrowers assess whether their loans and employers qualify for PSLF and allows them to generate the right forms to take to their employer to sign and submit.”

Morabito also noted that the department “has increased our outreach to borrowers about PSLF.”

Some lawmakers have proposed overhauling the entire program.

California Sen. Kamala Harris was one of 17 original cosponsors of a bill introduced in April that would expand to the loan forgiveness program to all federal loans, erasing much of the complexity. It does not, however, have Republican support, meaning it is unlikely to advance in the GOP-controlled Senate..

Emily Cadei works out of the McClatchy Washington bureau, where she covers national politics and policy for McClatchy’s California readers. A native of Sacramento, she has spent more than a decade in D.C. reporting on U.S. elections, Congress and foreign affairs for publications including Newsweek, Congressional Quarterly and Roll Call.
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