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Bryan P. Keenan

Is Public Service Loan Forgiveness not so forgiving after all?

Established a decade ago, Public Service Loan Forgiveness served as a "broad, employment-based forgiveness program for federal student loans,” as described in an internal blog. The PSLF allowed government or nonprofit workers to have their loans erased after 10 years, provided they made on time payments.

Ten years later, the first group of borrowers participating in the program is waiting to have their loans forgiven in the fall of this year as they have been led to believe.

They may be waiting longer, assuming student debt forgiveness occurs in the first place.

The Department of Education filed a legal motion that asserts no final decision on the forgiveness of student loans. They cite the verbiage of the agreement. Final eligibility for PSLF is decided only making 120 qualifying payments. The move could impact 500,000 public servants that include teachers, social workers and police officers.

Many of the PSLF participants made what they considered binding life decisions. Part of that sacrifice involved taking lower-paying jobs in the public sector. Even though they made the required payments over ten years, they could still be stuck with thousands of dollars in debt with loans that piled up interest.

In response to the court filing, a group of lawyers and the American Bar Association filed suit against the Department of Education. They are accusing the agency of changing its position on qualifying for PSLF.

The Justice Department argues that it has taken no final action. While initially accepting applicants’ paperwork, determinations are based on the individual borrower and the agreements remain interim and non-binding. They are requesting a “summary judgment” to have the case settled without a trial.

One of the plaintiff’s attorneys believes that the stakes are high for participating public servants. If the Department of Education has no intention of living up to its agreement, buying a home, saving for retirement, or even enjoying any sense of financial stability may have to wait.

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Bryan P. Keenan & Associates, P.C.

993 Greentree Road
Suite 101
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