Committee Report: Education Department Ignored Early Warnings of Problems in Public Service Loan Forgiveness Program

WASHINGTON – A report released today by the Committee on Education and Labor reveals that the Education Department ignored early warnings from internal staff that could have prevented the disastrous implementation of the Public Service Loan Forgiveness (PSLF) program. The report, “Broken Promises: How the Department of Education Failed America’s Public Servants,” includes previously unpublished audits completed by Education Department staff in 2016 and 2017 that raised significant issues regarding FedLoan’s ability to properly implement the program. 

FedLoan is the sole loan servicer contracted to carry out the Public Service Loan Forgiveness program.

Despite those internal warnings, the report says, the Department failed to take action to ensure eligible public servants received debt forgiveness. Of the 76,000 loan forgiveness applications that were processed as of March 2019, 99 percent were denied. 

“This report reveals internal audits conducted by the Education Department three years ago showing that FedLoan was not properly implementing the Public Service Loan Forgiveness program. Rather than addressing those issues, the Department ignored the warnings raised by its own staff and failed to take necessary steps to keep the promises made to student borrowers,” said Chairman Scott. “The Committee held a hearing about this issue last month and has made multiple requests for relevant information. We will continue to push the Department to faithfully implement the program so that student borrowers can receive the loan forgiveness they were promised.”

The report notes that the initial issues uncovered by the Education Department audits – and in subsequent reports published by the Government Accountability Office (GAO) – still persist today. Recent borrower complaints indicate that PSLF implementation still suffers from confusion about verified public service employers, inaccurate counting of qualifying payments, and inaccurate information being provided to borrowers.

On September 19, 2019, the Committee held a hearing to explore the challenges with PSLF implementation and push the Department to take specific steps to improve program performance. 

To read the full report, click here.