Providence, RI – A version of the bill introduced by Senators Sheldon Whitehouse (D-RI) and Tim Kaine (D-VA) to fix a glitch in a federal loan forgiveness program was included in the omnibus federal spending bill that was signed into law last week. The provision will help relieve the financial burden for eligible Rhode Islanders working in public service fields, like teachers, social workers, and military personnel, who sought to use the Public Service Loan Forgiveness (PSLF) program but were nonetheless left with massive loan balances they thought would be forgiven.
“Congress created this program to encourage bright college graduates to dedicate their talents to making our communities a better place. After hearing from a constituent who was prevented from getting the relief she was promised due to a bureaucratic glitch, I developed this provision to help ease the burden on borrowers in a similar position,” said Whitehouse. “I encourage any Rhode Islander who thinks they may be eligible to contact my office for assistance getting the loan forgiveness they have earned.”
Rhode Islanders working in public service who believe they may qualify for relief under the new provision can contact Whitehouse’s constituent services office at firstname.lastname@example.org or (401) 453-5294 for assistance getting on the correct payment plan. Whitehouse sponsored the law in November after his office was contacted by Dr. Alana Bibeau, a constituent who was left with an unexpected loan balance after years of making payments through the PSLF program.
“The PSLF program was designed to recruit and retain dedicated college graduates, encouraging them to embark on careers in the public sector in exchange for federal student loan forgiveness after 10 years of service,” said Dr. Bibeau, a senior lecturer of Sociology at the University of Rhode Island. “Changes in repayment plans and loan servicers over the years meant that many college graduates who made significant life decisions, put other financial goals on hold, and took lower-paying positions in the public service sector in order to benefit from PSLF, found that monthly payments made under these previous income-based repayment plans would not count towards forgiveness. The provision in the omnibus based on Senator Whitehouse’s bill helps to correct this wrong. It will ensure that public service employees who have been making qualified payments, but under the incorrect repayment plan, will receive credit for these payments. Many more college graduates who have committed themselves to public service work will now be able to utilize the program as it was intended.”
Congress established the bipartisan loan forgiveness program in 2007 to help graduates in public service professions pursue sometimes lower-paying careers serving their communities without facing decades of crippling loan payments. The program allows borrowers to erase the balance of their student debt if they spend 10 years working for a nonprofit or government employer while making qualifying payments. Due to a lack of consistent and clear guidance from loan servicers and complicated program requirements, some borrowers believe they are making qualifying payments under the program when they are not.
The version of the legislation in the spending bill includes $350 million to help borrowers in this situation on a first-come, first-served basis. It also requires the U.S. Department of Education to make available a simple method for borrowers to apply for loan cancellation, and conduct outreach to help borrowers make use of the program.
Whitehouse and Kaine’s bill was endorsed by the National Education Association and the American Federation of Teachers.