« Summary of the McConnell Bailout Bill | Main | How to Help Small Businesses...Fast »

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.

Comments

The comments to this entry are closed.

Contributors

Current Guests

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.

Categories

Bankr-L

  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless ([email protected]) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

OTHER STUFF