Mitigating the PSLF Disaster: Building a Borrower-Friendly Student Loan Forgiveness Program

Abstract

In 2007, Congress promised student loan forgiveness to our teachers, public defenders, nurses, and other public servants. The bargain was simple: spend ten years in public service and your debt will be eliminated. Unfortunately for borrowers, the program turned out to be a disaster, with loan forgiveness denial rates as high as 99%. Individuals frequently spent a full ten years in public service with the understanding that their loans would be forgiven, only to be informed after a decade that they do not in fact qualify. This Article proposes a revenue-neutral, bipartisan fix to the loan forgiveness program to ensure that borrowers no longer face this harsh reality. The proposal will also encourage more individuals to pursue public service and ensure that the program’s benefits no longer disproportionately flow to highly paid professionals.

Keywords: PSLF; Loan Forgiveness; Policy; Reform; Income Inequality