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Student loan relief for public service workers: repeal the 15-day rule

posted by Alan White

More than one million public servants – nurses, soldiers, first responders, teachers—should be eligible now or soon for student loan cancellation under existing law – the Public Service Loan Forgiveness program. Congress and the Administration can accelerate this process now.

The Education Department and its servicer FedLoan have notoriously rejected 98% of PSLF loan cancellation requests. One of the reasons is a pointless and unhelpful regulation that was not part of the Congressional legislation, but was added by the Education Department – the 15-day rule. The PSLF law calls for public servants to have their loans cancelled after 10 years of repayment. The Department’s regulation defined 10 years of repayment as 120 payments, each made within 15 days of the due date. In real life borrowers make payments early and they make payment late. During the present crisis they cannot be expected to meet this rule.

Congress is already considering a bill that would give the Education Secretary broad authority to waive regulations. The 15-day rule should be the first to go. The Department and servicer FedLoan should work together to clear away ALL regulatory obstacles to full PSLF implementation.

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