U.S. House Tackles Public Service Loan Forgiveness Issues The higher education subcommittee of the U.S. House held a contentious hearing Thursday to investigate the failed implementation of the troubled Public Service Loan Forgiveness Program.
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U.S. House Tackles Public Service Loan Forgiveness Issues

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U.S. House Tackles Public Service Loan Forgiveness Issues

U.S. House Tackles Public Service Loan Forgiveness Issues

U.S. House Tackles Public Service Loan Forgiveness Issues

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  • <iframe src="https://www.npr.org/player/embed/762485777/762485812" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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The higher education subcommittee of the U.S. House held a contentious hearing Thursday to investigate the failed implementation of the troubled Public Service Loan Forgiveness Program.

AUDIE CORNISH, HOST:

We turn now to a hearing today in the U.S. House with the official title Broken Promises. It's as if angry student borrowers had been allowed to name it, not members of Congress. Lawmakers were investigating the troubled program meant to forgive the student debt of nurses, first responders, teachers and other public servants. As NPR's Cory Turner reports, there's little doubt that Public Service Loan Forgiveness hasn't helped many people - 99% of borrowers have been rejected. The question is, why?

CORY TURNER, BYLINE: Today's hearing was short on substance and long on finger-pointing, which is good because unpacking who is to blame for the troubled PSLF program is also the best way to unpack why it went wrong.

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KELLY FINLAW: I did what I was asked to do. I called. I made my payments on time.

TURNER: Kelly Finlaw is an art teacher in New York City and appeared to tell her story of rejection.

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FINLAW: I was misled.

TURNER: Misled, she says, by companies called servicers that the U.S. government pays to manage federal student loans. Finlaw says she asked repeatedly - what do I need to do to qualify? - only to find out later that she'd had the wrong kind of loan all along.

One company came in for a lot of criticism. It's the only one that officially handles Public Service Loan Forgiveness. It's called the Pennsylvania Higher Education Assistance Agency or PHEAA for short. The company's CEO was asked to appear but declined, which bothered teacher Kelly Finlaw.

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FINLAW: I think that it's interesting that if my principal called me into his office today and I just said, no, I'm not going to show up, it would mean my job. And yet there's an empty seat next to me.

TURNER: In a letter to the committee, PHEAA's CEO argued that his company does what Congress and the Ed Department tell it to do - the implication being if something's not working, blame them. Yael Shavit did blame them.

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YAEL SHAVIT: And the Department of Education didn't rise to the occasion to increase its oversight of PHEAA and its other servicers to ensure that borrowers weren't harmed.

TURNER: Shavit is assistant attorney general of the state of Massachusetts, and she knocked the department for failing to police and punish the loan companies it's supposed to be overseeing. Less than a year ago the department's own inspector general said pretty much the same thing.

But Republican Congresswoman Virginia Foxx of North Carolina tried to make one thing clear - this is not the fault of the Trump administration, she said, pointing out that in the program's early years, President Obama's Education Department gave...

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VIRGINIA FOXX: No guidance whatsoever to anyone.

TURNER: And she's right. Many of the borrowers speaking out now were asking for help then and getting crickets, or worse, bad information. Finally, lawmakers pointed fingers back at themselves.

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LLOYD SMUCKER: We as members of Congress have an obligation to write laws that are clear.

TURNER: That's Republican Congressman Lloyd Smucker of Pennsylvania, who pointed out that PSLF, when it was created in 2007. Only applied to a small fraction of borrowers, and Congress knew it. If there's any good news for borrowers, it's that most lawmakers seem to agree today, enough of the why and who - the program needs fixing. It's time to talk about how.

Cory Turner, NPR News.

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