By Jenny Smulson, Director of Government Relations, AJCU
On March 25, Congressional leaders and the Administration agreed to a $2 trillion stimulus package in response to the coronavirus crisis. This legislation must pass the Senate and the House and be signed by the President before it is enacted; all parties are working tirelessly to move the bill forward quickly.
Given the dramatic losses suffered by institutions of higher education, and in an effort to hold students and employees harmless during this crisis, AJCU has been working to alert Members of Congress about the challenges that our schools continue to face. AJCU Presidents were deeply engaged in advocacy and pushed hard to ensure that students and institutions received support in the legislation. We await the final legislative language, which will provide details about what has been made available for colleges and universities and their students.
AJCU Public Service Loan Forgiveness: A Federal Program Aligned with Jesuit Values
When you attend a Jesuit school, you come to know deeply the value placed on service. Service to others is embedded in the philosophies of ‘women and men for others,’ Magis and a faith that does justice. This issue of Connections’ focus on service learning reinforces that the spirit of service remains vibrantly alive on our Jesuit college and university campuses. And because the Jesuits educate for justice, it is no surprise that many graduates of Jesuit schools continue that mission-centered work after graduation.
While the Jesuits have been at this since the 1540s, Congress has also long recognized the value of service to our nation. One recent example of the federal government’s recognition of service resulted in the creation of the Public Service Loan Forgiveness program (PSLF). Authored by the late Senator Edward Kennedy (D-MA), passed through Congress with bipartisan support in 2007, and codified into law with the signature of President George W. Bush, PSLF was created to enable young people to “help solve the problems of their communities.”
It takes great commitment to successfully earn student loan forgiveness under the PSLF program. There are several specific criteria one must meet to be eligible for PSLF. Individuals seeking to qualify must have a federal direct loan or a loan that has been consolidated as a federal direct loan; work full-time for a government or non-profit organization; be enrolled in an income-driven repayment plan; and make 120 qualifying payments (regular on-time payments over ten years). After meeting all of the criteria, the successful candidate will have the remaining balance of the outstanding loan forgiven (tax free).
The program is an equalizer. It provides students interested in public service with an opportunity to give back to society without fear of an overwhelming debt burden or concern about the significant, forgone lifetime earnings from taking a lower-paying public service job. PSLF encourages graduates to work in schools, in criminal justice, as first responders, in public health, in valuable non-profit or local, state and/or federal government service.
Problems and Change
In spite of the great promise associated with the PSLF program, there have been many challenges. These include criticism about the U.S. Department of Education’s (DoE) management of the program; a lack of transparency about why candidates have been denied loan forgiveness; a lack of accountability for loan servicers who have been accused of providing inaccurate information to participants during the loan repayment process; and great concern about how few individuals participating in the program have successfully received loan forgiveness.
In response, Congress has taken steps to hold the DoE accountable, to provide greater oversight of the program, and to improve program operations. After hearing reports of a 1% success rate for students successfully receiving loan forgiveness, Congress created the Temporary Expanded-PSLF (TE-PSLF) as a remedy for individuals whose payments were mis-recorded or who had been directed to the wrong repayment plan by a servicer. It seeks to address other hurdles that have hindered eligible participants from benefiting from the program. With TE-PSLF now in place and with continued Congressional attention, advocates for the program hope to see a real increase in the percentage of successful participants.
Legislative Advocacy
The PSLF program was authorized under the Higher Education Act (HEA) and has its champions and detractors in Congress. Prior to the COVID-19 crisis, HEA was a priority issue on Capitol Hill. The House Committee on Education and Labor passed the College Affordability Act (HR 4674) that reauthorizes PSLF and seeks to improve the program by making the repayment process simpler and more transparent for borrowers. Legislation has been introduced to improve program operations in the Senate by Senators Tim Kaine (D-VA) and Kirsten Gillibrand (D-NY) (S.1203 – What You Can Do for Your Country Act of 2019), and in the House by Representatives Mark DeSaulnier (D-CA) and John Sarbanes (D-MD) (HR 2441). That is good news.
But influential members on the important Senate Health, Education, Labor and Pensions (HELP) Committee, including Chairman Lamar Alexander (R-TN), have expressed less enthusiasm for the program and may seek to limit its benefits. Other Senators, including Ranking Member Patty Murray (D-WA), remain steadfast in their support of PSLF.
As the President’s FY 2021 budget eliminates PSLF (though grandfathering current participants), ongoing advocacy is critical to preserving and improving the program. We are thankful for a strong advocacy community united to preserve PSLF.
In this time of uncertainty brought on by COVID-19, our public servants are on the front lines, including health professionals, educators, community servants, and local, state and federal government officials. Programs that encourage service to others, from a Jesuit perspective, are worthy of investment and worth fighting for.
For more information on the Public Service Loan Forgiveness program, visit studentaid.gov and preservepslf.com.