House Bill Simplifies and Fixes PSLF, Overhauls Higher Education

A bill that has been introduced in the House of Representatives would simplify the Public Service Loan Forgiveness (PSLF) program for current and would-be participants.

The College Affordability Act, introduced by Rep. Bobby Scott (D-Va.) on Tuesday, is aimed at  overhauling of the higher education system and making college more affordable.

With regards to PSLF, the bill seeks to make a number of changes to make it easier for the borrowers to repay loans, offer loan forgiveness to those who’ve applied but have been wrongly rejected, and simplify the overly complex program.

When PSLF started in 2007, its goal was to persuade people to join public service in exchange for loan forgiveness. After 10 years of work in public service and a decade of monthly payments, the balance of borrowers’ student loans were to be forgiven.

However, when it came time to have their loans forgiven 10 years later, nearly 99% of those who applied for forgiveness were rejected, in part because the task of applying for forgiveness was onerous, confusing and misleading. A scathing recent report issued by the House Committee on Education and Labor highlights the reasons for those failures.

To help fix rampant problems with the PSLF, the College Affordability Act will improve and expand the program by:

  • Allowing PSLF borrowers who were in the wrong repayment plan to count original monthly payments toward the total for loan forgiveness;
  • Requiring the Department of Education to create an appeal process to help borrowers dispute denied PSLF applications;
  • Expanding the job categories and types of public employees who are eligible for PSLF.

With the cost of college continuing to rise and the number of people saddled with student loan debt also increasing (and with people taking longer to pay back their loans), the legislation will provide much-needed relief to millions of other students and their families.