Why the rejection rate for Public Service Loan Forgiveness is so high

The rejection rate for Public Service Loan Forgiveness is 99%

“Under the Public Service Loan Forgiveness Program, Americans can get all of their federal education debt discharged if they spend 10 years working in government or at a nonprofit. […] Last week, the Department of Education reported that it had rejected more than 99 percent of all applications submitted through the end of June. Of the 28,913 applications reviewed, just 289 were approved. And only 96 people actually finished the process of having their loans scrubbed.”


“There’s Supposed to Be a Student Loan Forgiveness Program for Public Servants. So Far, It’s Rejected Almost Every Applicant,” Slate, 9/26/18

Imagine hearing about the newly enacted Public Service Loan Forgiveness Program (PSLF) in 2007 and feeling thankful that you could freely pursue your post-college dream career at a nonprofit. The thousands of dollars in student debt you’d accumulated will be wiped away as long as you make student loan payments on time for 10 years.

Now imagine diligently pursuing your career in public service, making those student loan payments every month for a decade, submitting your application to the Department of Education—and getting rejected.

So far, this nightmare has happened to 28,624 Americans.

Who’s to blame? The Department of Education has been opaque about what kinds of jobs qualify, even flip-flopping on whether certain types of nonprofits meet the criteria—which has caused enough confusion to prompt a lawsuit. Student loan servicers are also notoriously bad at explaining all the ins and outs of loan forgiveness qualification, like whether you’re on the right kind of repayment plan or you borrowed from the correct source. (Only loans made directly by the federal government qualify.) Processing delays and errors also often hinder borrowers, with servicers often putting the loans in forbearance when they aren’t supposed to.

And while you can (and should) ask your servicer to certify that your job qualifies you for Public Service Loan Forgiveness, the thousands of certification letters sent by the program administrator, FedLoan Servicing, are non-binding and can be rescinded at any time.

Where does that leave borrowers? While it’s necessary to do your research and due diligence (starting with the government’s PSLF help tool), it’s hard to take the promise of PSLF at its word. If you’re on track for forgiveness, keep making your payments on time but double (or triple) check that you’re on the right payment plans and that you have Direct Loans—not loans from a private bank with federal backing. And stay on top of your paperwork. Borrowers must recertify their income and family size every year.

And remember, your vote has a direct impact on who creates—and enforces—programs like PSLF. It also determines the effectiveness of the Consumer Financial Protection Bureau (CFPB), which has regulatory oversight over shady practices by student loan servicers. If you want to make sure that the next administration actually keeps the promises to student loan borrowers, make your voice heard this November in the midterm elections. Not registered to vote? Do it here.

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