The threat to the Public Service Loan Forgiveness Program has never been greater, with President Trump’s Administration, Betsy DeVos’s Education Department, and now even the so-called “Liberal” Media piling on and calling for PSLF to be entirely scrapped.
You know it’s bad when outlets like Buzzfeed have gotten in on the game, especially when they’ve chosen to title their story about it “Public Service Loan Forgiveness Isn’t Working, Watchdog Says” (which is a blatant lie, or at least a gross mischaracterization of the Truth).
I’m simply blown away by the list of media entities now reporting terrible things about PSLF, from the Consumer Financial Protection Bureau themselves (who should know better, and should have much more clearly stated exactly what the problem was in their report, instead of allowing their findings to be bastardized and politicized) to Forbes, Consumerist, USA Today, US News, Buzzfeed, and others.
It seems that anyone with an audience is under pressure to attack PSLF, and call for it’s disintergration, but what’s really behind this new push to dismantle the most effective Federal Student Loan Forgiveness Program in existence?
Why is PSLF Under Attack?
What do I think is really the source of these attacks on PSLF?
Maybe it’s the fact that the American taxpayer was finally starting to catch on to the idea that the billion dollar no-negotiation student loan servicing contracts we’ve been financing haven’t been generating any actual benefit to us.
Maybe it’s the fact that we’re currently spending $38 to Collect $1 of outstanding student loan debt?
Maybe it’s the fact that Betsy DeVos, who has proven her complete incompetence at running the Department of Education, has family ties to the very same student loan servicing companies that would have been fired years ago by any private-sector employers thanks to their terrible performance, negative return on investment, and thousands of accusations of sustained illegal activities?
Attacking PSLF changes the conversation, allowing President Trump, Betsy DeVos, and the people she represents (“protects” may be more accurate), to perform the old sleight of hand trick preferred by swindlers, con artists and liars: blaming others for their own failures, in an attempt to keep their corrupt, nepotistic, cash-grabbing student loan servicing contracts running.
I think the attack on PSLF is being used as a smokescreen to hide the highly unethical, incredibly illegal things being done by the student loan servicing companies across the country, and that this is the best way to protect those companies, their contracts, and the profits that they’ve been raking in at our expense.
When Did This Attack Begin?
PSLF’s troubles began way back under the Obama Administration, when talk first emerged about nerfing the program’s benefits in order to reign in it’s associated costs.
These were legitimate complaints and criticisms, coming from the philosophy that PSLF needed to be protected from costing too much, and shored up against bankrupting itself by giving too much away to a small group of the biggest borrowers.
The biggest complaints were that the benefits were simply costing too much taxpayer dollars, especially since they came without any sort of lifetime cap, limit or maximum placed on the amount of money that could be forgiven, leading to horror stories like rich kids having their half million dollar loans forgiven.
Unfortunately, President Obama’s Administration didn’t realize that they’d let the genie out of the bottle, and unfriendly, small-Government folks developed an attack agenda by concocting tales of rich Doctors, Lawyers, Dentists and the like preparing to wipe out their loans via PSLF loopholes.
At the core of the push was the idea that rich people were raking in tons of money via PSLF benefits that were supposed to be distributed to poor people, or least people with limited means.
And unfortunately this very same narrative seems to be the under-current running through the recent calls to destroy PSLF, with all sorts of people coming out of the wood-work to claim that they’re sure it’s a scam, and that only President Trump and Betsy DeVos can protect us from the blood-sucking leeches who call themselves public service workers, but who are doing nothing short of stealing taxpayer funds from ordinary, hard-working, blue-collar Americans.
Thanks Obama… Really
Initial calls for PSLF’s reform came to a head when President Obama submitted his proposed 2015 Budget for Congressional approval, which contained some significant suggested changes to PSLF, including:
- Capping PSLF benefits at a max of $57,000 lifetime in forgiveness
- Requiring those with loans over $57,000 to wait the full 25 years before they’re forgiven
- Only counting payments made under Income-Based Repayment Plans as eligible toward PSLF’s 120 payment threshold
- Forcing Married Borrowers to combine income for the purposes of determining their monthly student loan payments
Fortunately, this first attack on PSLF mostly fizzled, as all talk of the $57,000 lifetime limit, and with the extension to a full 25 years for repayment for “high-borrowers” being completely abandoned.
However, President Obama’s Administration did signal that it was ready for changes, and that it wanted to re-balance the PSLF program to protect it’s financial future, each of which were moves that I personally applauded.
By adopting suggestions 3 and 4 above (only counting Income-Based payments and forcing Married borrowers to file taxes jointly for the purposes of determining their payments), President Obama’s Administration closed two of the largest loopholes to PSLF scams, and seemed like they’d put the program back on track for long-term health and success.
After these updates were implemented, and especially after all talk of the $57,000 cap ceased, I thought PSLF was rock-solid, secured for many years to come, and still the best Federal Student Loan Relief Program available.
But boy was I wrong, because here we are again, talking about PSLF getting nerfed, but instead of talking about making slight changes to the program and it’s eligibility conditions, we’re struggling to keep any semblance of it alive in the face of an all-out attack from the very people who SHOULD be protecting PSLF in the first place; our own Department of Education!
What Does This Latest Round of PSLF Hit Pieces Say?
The latest round of attacks on PSLF call it ineffective, expensive, bloated, etc. And while some of this stuff is certainly true (there are still issues with the system, though not large enough issues to even consider scrapping it entirely), many of them seem to stem from a recent report issued by the Consumer Financial Protection Bureau.
This report included scathing criticism for the student loan servicing companies who are supposed to be handling PSLF itself, but who have bungled the process up so badly and lead to so much confusion, that I can almost understand why there’s so much vitriol toward PSLF coming from ordinary Americans.
But these recent stories are not presenting a fair view of the CFPB’s report. In fact, some of these stories are outright lying about the conclusions of the CFPB, in that they’re transferring the CFPB’s blame from the student loan servicers to the PSLF system itself.
My read of the CFPB report runs more along the lines of the idea that it’s the student loan servicing companies who are screwing things up, and that they are the thing that needs to be scrapped, NOT PSLF!
So what’s with the mixed message? Why would the Media conflate criticisms of student loan servicing companies with the benefits package that they’re supposed to be supporting?
Could it be that these student loan servicing companies, along with huge banks, don’t want to lose their multi-trillion dollar business accounts, which make tons of money based on the idea that student loan servicing is complicated, messy, and troublesome, leading to all sorts of confusion for borrowers, causing things like missed payments, penalties, fines, fees, and a loss of eligibility for forgiveness benefits?
Folks, the foxes are guarding the henhouse here, and our so-called liberal media is swallowing the narrative, then spitting down our throats are propaganda. Our “liberal” media is turning us against ourselves, getting us to call for scrapping a system that was created entirely to help us dig our way out of the trap set by the big banks, student loan servicing companies, and higher education corporations in the first place: excessive student loan debt.
Don’t believe me? Check this out the CFPB’s report for yourself, right here.
Spend just 10 minutes reading through this thing, and I’m sure you’ll come to the same conclusions that I have.
What Does the CFPB’s Report Actually Say?
Titled “Staying on track while giving back”, and subtitled “The cost of student loan servicing breakdowns for people serving their communities”, this report starts off by explaining the original reason for forming the PSLF program: helping to finance expensive degree and credential programs required by low-paying public service positions.
The report champions the need to provide some form of financial assistance to these people, even going as far as to explain that those borrowing significant funds to receive credentials required by Public Service positions may be significantly behind the general workforce on things like rates of homeownership, retirement security, asset formation and positive financial outlooks.
Wrapping up this statement, it’s made quite clear that PSLF was created for a good reason, “intended to ensure that nurses, teachers, first responders, and other public servants can serve their communities without it being to their long-term financial detriment, particularly as college costs continue to rise and advanced education requirements expand.”
However, here’s where things get bad, as Seth Frotman, Assistant Director and Student Loan Ombudsman, explains: “Unfortunately, too often this is not the case… As… many borrowers attempting to invoke their rights… to these protections point to a range of student loan industry practices that delay, defer, or deny access to critical consumer protections.”
He continues, “The Bureau is committed to monitoring the industry for key issues and illegal practices affecting borrowers who are trying to access key consumer protections so they can continue to give back to their communities.”
But if this is the CFPB’s thesis statement about the problems related to PSLF, then why are all these Media stories calling for the program to end?
After all, the CFPB isn’t saying it’s the PSLF program itself that has issues, but that the program benefits are being severely misrepresented, mismanaged, and mishandled by the student loan servicing companies!
What Can You Do to Help Protect PSLF?
With so many different sources complaining about PSLF, including calling for it’s complete obliteration, how are ordinary Americans supposed to make a difference in protecting these vital forgiveness benefits?
Short of mass civil disobedience, I think our best bet is continuing to support the Petition to Protect PSLF, which you can find here: https://www.change.org/p/defend-federal-student-loan-forgiveness-benefits-pslf.
We just hit 25,000 signatures over the weekend, and I’m feeling pretty confident that if we can get this thing up to 50,000 or 100,000 signatures, then we’ll be able to use it for leverage in getting Congress to take action against President Trump and Betsy DeVos’s plan to kill PSLF off entirely.
Please, do you part in stopping these monsters from destroying the very best student loan forgiveness benefits package ever offered to the American people.
Do you part in standing up to the big banks, the corrupt student loan servicing companies, and the terribly selfish individuals looking to do their bidding for them in return for campaign donations by spreading this story as far and as wide as you possibly can.
Share a link to the Petition to Protect PSLF with everyone you know. Email it to your friends and family. Post it on Social Media. Spread it, and this Blog post, around as much as you can, to wake up as many people as possible, and hopefully turn the tide in the attack on PSLF.
The more people we can inform about the true nature of this attack on PSLF (that it’s being done to protect banks and student loan servicing companies, not the American taxpayer!), the more likely we’ll be able to protect it from being destroyed.
And if we can stop them from dismantling PSLF, maybe we can prevent them from coming after the next set of benefits that they’re sure to try to kill off.
By: Tim Marshall
Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.