Report: Protecting Military Borrowers: How the Department of Education Can Restore the Promise of Public Service Loan Forgiveness for American Servicemembers

Introduction

Policymakers have long acknowledged that financial readiness is intrinsic to military readiness and that the unique financial stress imposed by military life can impede America’s national security. In fact, Congress has repeatedly taken steps to mitigate this financial stress with protections specifically crafted to alleviate certain obstacles imposed during the repayment of consumer debt. With the emergence of student debt as a primary source of financial distress for servicemembers, Congress has continued to craft student loan protections with a keen eye towards alleviating the strain on military borrowers. In 2007, with the introduction of the PSLF program, servicemembers were offered a new avenue to mitigate this financial burden.

In practice, the PSLF program has proven to be an essential component of the United States military—serving as a valuable recruiting and retention tool across every branch of service, supporting the military readiness of our nation’s Armed Forces, and offering veterans a financial pathway through which they can continue their service to their communities.

To date, hundreds of thousands of public service workers, including servicemembers and veterans, have applied to have their loans forgiven through PSLF. However, with only two percent of applicants successfully receiving loan forgiveness, the promise of PSLF is broken. Numerous investigations and reporting efforts, including those conducted by the SBPC and AFT, have documented how the widespread mismanagement of the program by ED and the shoddy servicing practices of ED’s contracted servicers tasked with implementing the program have caused millions of borrowers, including servicemembers, to forfeit their right to debt relief.

Read more below or download a copy of the report here.