Md. lawmakers push DeVos on changes to student loan forgiveness program

Education Secretary Betsy DeVos speaks during a student town hall at National Constitution Center in Philadelphia in September 2018. DeVos has announced changes to the rules for a program that forgives student loan debt for those who take public service jobs. (AP Photo/Matt Rourke)

More than three dozen state lawmakers are demanding answers from U.S. Education Secretary Betsy DeVos about changes to a student loan debt forgiveness program.

The letter written by Del. Lesley Lopez, D-Montgomery, calls on DeVos to provide information and guidance on how qualifying students can use the Public Service Loan Forgiveness program. The letter comes days after DeVos announced a tightening of rules governing the program.

“Thousands of our constituents will not be able to receive the debt relief they were promised and will face financial hardship if this mishandling continues,” Lopez said. “Ending the student loan crisis would dramatically improve the economic landscape of our state; and a big step forward would be that the Trump administration make right on our country’s promise to public servants.”

The letter was signed by 37 Maryland delegates, including Lopez, and six senators. All of the legislators are Democrats.

The loan forgiveness program was established in 2007 under President George W. Bush. The rules were expanded under President Barack Obama in an effort to deal with a crisis involving for-profit schools, including California-based Corinthian Colleges.

Rule changes announced late last week by DeVos tighten the eligibility rules.

DeVos, in a statement, said the program would save taxpayers $11.5 billion over 10 years.

“I called for this regulatory reset more than two years ago, as it became clear the old rules just weren’t working. I want to thank all those who provided thoughtful feedback during the process,” DeVos said in a statement announcing the changes. “We made substantive changes to our proposed rule based on your input. We believe this final rule corrects the wrongs of the 2016 rule through common sense and carefully crafted reforms that hold colleges and universities accountable and treat students and taxpayers fairly.”

Students first became eligible in 2017 for the program that forgives student loan debts if the borrower meets a number of requirements, including having made at least 10 years of qualifying payments while working for some public service employers. More than 1.1 million borrowers submitted applications to have their jobs and loans certified as eligible for the program. Of those, about 890,000 passed the initial step, according to a September 2018 Government Accountability Office report.

But very few of those who passed the first steps — about 19,000 people — have applied for loan forgiveness. Only 55 of those were granted loan forgiveness, according to the GAO report.

Lopez and other officials say the new rules are unclear and would pull the rug out from under some students who expected to be eligible for the forgiveness program.

“The state of Maryland is home to many who work to benefit the social good, including educators, government employees, social workers, health care workers and service members,” wrote Lopez. “These hard-working public servants are relying on this program and planning their futures around (the Public Service Loan Forgiveness program). Undercutting this program is a betrayal of trust.”

Last week, Maryland Attorney General Brian Frosh joined a coalition of other attorneys generals in calling for DeVos to provide data to help states address concerns about how the program is being managed.

Frosh said the information provided in July was “incomplete information that was not fully responsive to the states’ request.” The result, he said, was that students would be forced to choose between careers in public service and repaying their loans.

“Thousands of Marylanders have committed to 10 years of service to their communities, because they relied upon the promise of (the program),” said Attorney General Frosh.  “Instead of honoring that promise, Secretary DeVos has met them with confusing guidelines, lack of information and, ultimately, denial of loan forgiveness.”