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A Heroes Jubilee

posted by Alan White

Millions of heroes of the pandemic--health care workers, law enforcement and first responders, National Guard troops, public school teachers, and social workers--are suffering needless financial hardship because of student loans. Years ago Congress passed, and president Bush signed into law the Public Service Loan Forgiveness program. After repaying student loans for ten years while working in public service, these workers are entitled to have their remaining debt canceled by the Education Secretary.  In a continual insult to these heroes, the Education Department and its contractor continue to reject 98% of PSLF applications, for absurd bureaucratic reasons I have elaborated on elsewhere.

Another act of Congress, the HEROES Act of 2003 gives Education Secretary Cardona clear legal authority to fix this failure and cancel hundreds of thousands of student loans now. The HEROES Act allows the Education Secretary to waive any regulation or even statute as necessary to ensure that no individual or class of people experiencing hardship because of a national emergency suffers financial harm because of the emergency. With a few simple waivers of unnecessary rules, the Education Department could implement PSLF loan cancellations for hundreds of thousands or even millions under existing legal authority.

A broad, one-time effort to extend PSLF relief to all those eligible could happen in a few simple steps. First, the federal loan servicing contractors could identify ALL borrowers who entered repayment more than ten years ago and who are not currently in default, and send every one of them an invitation to fill out a simple form asking if they have been working in public service. Second, the existing maze of paperwork created by the Department’s rules could be waived in favor of a simple one-page form. The PSLF applicant need only certify under penalty of law that they worked full–time for at least ten years and still work in a qualifying job. The form’s checklist of jobs should include the words of the statute: 

a full-time job in emergency management, government, ... military service, public safety, law enforcement, public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations...), public education, social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy on behalf of low-income communities at a nonprofit organization), early childhood education (including licensed or regulated childcare, Head Start, and State funded prekindergarten), public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or [a job] at a [501(c)(3) tax exempt organization].

Any borrower signing and returning the form should immediately have all federal student loans cancelled. The Department should provide adequate funding to its contractors to fully administer this PSLF jubilee.

This simple program is fully consistent with the language of the PSLF statute, which requires only that the borrower make 120 payments in a qualifying payment plan, while working full time in public service jobs. The Department can suspend all of its complex paperwork rules requiring borrowers to obtain from employers and submit annual “Employment Certification Forms,” as well as the Department’s unnecessary regulation that payments must be made within 15 days of the due date to count towards the ten-year total. The Department could also use a statutory waiver to consolidate the Temporary Expanded PSLF program and stop requiring borrowers to first apply for PSLF and be denied before applying for TEPSLF. Finally, the Department could waive the rule that if a borrower consolidates prior Direct or FFEL loans, only payments made after consolidation count towards 10 years. All of these streamlining measures would be consistent with the language and intent of the original PSLF statute adopted by Congress.

In addition to the PSLF jubilee for public servants who have repaid student loans for 10 years, the HEROES Act waiver should also ensure that all public servants who, at the beginning of or during the pandemic emergency, were in loan repayment (including forbearance and other payment suspensions), will have all months they are working in public service counted, by waiving the 15-day on time payment rule and the no pre-consolidation payments rule.

The authority to waive the rules that have hobbled PSLF could not be clearer. The 2003 HEROES Act permits the Education Secretary to waive or modify any statutory or regulatory provision so that recipients of student loans affected by a national disaster are not placed in a worse financial position because they are serving in the military, residing in a disaster area, or have suffered direct economic hardship due to a national emergency. Any PSLF-eligible public servant whose federal loans are not discharged by definition suffers direct economic hardship, and as a result of regulatory provisions. This PSLF heroes’ jubilee would be a one-time, limited emergency response, taken during the emergency, and designed to ameliorate the emergency, exactly as contemplated by the HEROES Act.

There can be no question that the pandemic emergency, and the PSLF fiasco, are creating massive financial hardship for public servants, and impeding their ability to provide vital health care, education, and public safety. Using the HEROES Act emergency authority, the previous Education Secretary suspended payments on all federal student loans. That “payment pause” will expire, unless extended, on October 1, 2021. The Education Department will then face a potential catastrophe when it attempts to restart student loan repayment for millions of borrowers. Unless the Department acts to cancel as many of these pandemic-affected loans as existing law permits, PSLF borrowers will undoubtedly suffer needless hardship, damaged credit, unnecessary payments, and the continuing stress of navigating a Kafkaesque application process. While it could already have been accelerating PSLF discharge approvals, the Department has not done so to date.

This streamlined PSLF jubilee under the HEROES Act can also serve as a model for permanent changes in the Department’s regulations, forms, and contracts. But rulemaking, form redesign, and contract writing all take time, and the time to act is now.


Student loans (ARS) were flawed financial products - just like MBS. They were intentionally designed to create burdensome debt for nefarious purposes. Both MBS and ARS should be dumped because one is just as bad as the other. In fact, MBS has more fraud and corruption attached to it.

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