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Most Student Loan Forgiveness Applications Rejected

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The United States Department of Education only approved one percent of the people who applied for student loan forgiveness within the last year. The Temporary Expanded Public Service Loan Forgiveness was enacted in 2018. It was designed to help people who had trouble qualifying for student loan forgiveness.

The Public Service Loan Forgiveness was established in 2007. It was designed to forgive student loans if a person spent 10 years working in public service. Borrowers will have to make 120 payments on student loans. Congress had set aside $700 million to forgive student loans for people who did not qualify. Only $27 million has been used.

There were 54,184 people who applied for student loan forgiveness from May 2018 to May 2019. Only 661 applications were approved. The borrowers did not know what steps they needed to take. They did not know that they had to apply for the original Public Service Loan Forgiveness program. Seventy-one percent of the people who applied were ineligible.

Three percent of the people had their applications were denied because they did not make the required 120 payments. Four percent of the people were denied because they did not have federal student loans that qualified.

The Department of Education did not provide information on the expanded program. However, an official stated that they plan to create an online portal that will provide more information and simplify the application process. They did not say when this would be available.

House Democrats criticized the Department of Education for the way that they handled student loans. They stated that the department failed to follow the orders. They have proposed a bill that will permanently expand the program. Donald Trump signed an executive order back in August that would forgive student loan debt for veterans who are permanently disabled.

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