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Senator Gillibrand Says Student Debt Relief Program That Helps Those In Public Service Jobs Needs Overhaul

Kirsten Gillibrand at a podium
Gage Skidmore
/
Wikimedia Commons

New Yorkers who went into public service jobs and positions in education or non-profits might have counted on getting much of their student loan debt forgiven. But for most who used the Public Service Loan Forgiveness program, it failed them. The way it works is: You make 10 years of payments on your student loan, then the remaining balance is forgiven – often about half of the original debt. Senator Kirsten Gillibrand says this incentive is important.

“I think public service careers are among the lowest paying jobs, but they’re the jobs we desperately need.  And we’ve seen through this pandemic how essential critical workers are. We need people to go into nursing; we need people to go into teaching; we need people to go into public service careers; we need more firefighters, more police officers.  So, it’s important.”  

New York PSLF Borrowers: 89,764; Total Debt: $8,304,577,073

The loan-forgiveness program, famously gutted by Trump administration Education Secretary Betsy DeVos, works for only about 1.5% of the people using it. Gillibrand says any number of technicalities kick people out. She’d like to reform the program by making more people eligible. Her proposal is called the ‘What You Can Do for Your Country Act.’

“My legislation would offer relief to thousands of New York borrowers …. First it would offer a new option to have half of their loan-forgiveness after five years.  Then either pursue a career in a new field with less debt, or continue to work in public service for the next four years and receive full forgiveness.”

Gillibrand’s bill goes further than measures in President Biden’s proposals, that seek to have PSLF be more successful for those now counting on it. Her bill provides:

  • Reduce confusion surrounding PSLF eligibility – and expand eligibility – by permanently allowing all types of federal loans and repayment plans to qualify. This bill would also allow borrowers to consolidate their loans without losing credit toward forgiveness.
  • Provide borrowers with a partial forgiveness benefit after five years of public service. This would allow borrowers to contribute a shorter, but still meaningful, period of public service and still receive a benefit from giving back.
  • Ensure that the Department of Education provides public servants with clearer information and guidance on the program.

She worries that without this incentive, fewer college grads will go into essential government, health, education, and other lower-paying jobs.