U.S. Department of Education adopts Courtney recommendations on student loan forgiveness

The Day

By: Sten Spinella

October 11, 2021

The U.S. Department of Education has adopted policy changes pushed by U.S. Rep. Joe Courtney, D-2nd District, that will help service members gain easier student loan forgiveness.

Courtney communicated with U.S. Secretary of Education Miguel Cardona, the former Connecticut education commissioner, to express support for the policy. Courtney meanwhile collaborated with Rep. Dusty Johnson, a South Dakota Republican, to introduce the Recognizing Military Service in Public Service Loan Forgiveness Act (PSLF), which would allow American service members to count the full length of their service toward their student loan forgiveness.

The bill seeks to correct U.S. Department of Education practices involving applications by active-duty military service members for the loan forgiveness. The rules that had been in place have prevented a number of active-duty service members who have deployed far away from their families from applying their full period of service toward forgiveness, meaning they have to tack on time to their service in order to qualify.

Courtney has also championed the proposed Build Back Better Act, a social spending package that has yet to pass, which includes the PSLF legislation he sponsored with Johnson. The package, which was originally slated for $3.5 trillion, could shrink to $2.3 trillion or less.

Courtney said the Department of Education changes essentially do what his proposed legislation and the Build Better Act would do if passed by Congress

“The Department of Education had no problem with us incorporating the legislation in Build Back Better, but in many respects this makes the need for a statutory change moot,” Courtney said Thursday. “At this point I think the freestanding bill is on standby. … The process of fixing this problem for military service members will begin January 1st of next year. We still have work to do in terms of oversight to make sure this thing is clicking in as promised. But as a matter of law the need for a statutory change at this point is just not as great given the fact that the department’s exercised its lawful discretion to fix the problem.”

On its Oct. 3 program, "60 Minutes" ran a segment about public service loan forgiveness, noting that only 2% of military members who applied for the program were deemed eligible.

Courtney said he spoke with House Speaker Nancy Pelosi, who saw the segment, and it “kind of turbocharged her interest in getting this thing fixed.”

A law was passed in 2007 setting up the Public Service Loan Forgiveness program. It allows people who work in qualifying jobs — nurses, teachers, police, firefighters, for example — to enroll in income-driven repayment plans that will end in student loan forgiveness after 10 years of qualifying service. Courtney's bill extends coverage to new groups of military members, which generally includes deployed active-duty members and National Guard members.

Courtney criticized the Department of Education, which discharges loan payments for the program, under former President Donald Trump's administration for not adhering to the spirit of the original law, and for not counting periods of loan deferment/forbearance during certain periods including deployments to the 10-year threshold.

The Government Accountability Office found that more than 175,000 military members could qualify for the program. But between September 2017, when the first borrowers were eligible for loan forgiveness, and January 2020, of the 5,180 military members and Department of Defense civilians who applied, only 287 people were approved for loan forgiveness under the PSLF program.

The GAO reported the most common reasons for the denials were not enough qualifying payments and missing information on the form and that the DOD could help potential applicants become aware of all eligibility requirements.

Courtney said that while Johnson is supportive of the Department of Education changes, he doesn’t see him voting in favor of the Build Back Better act.

“Allowing all deployed service members to receive credit toward student loan repayment is only fair,” Johnson said in a statement last week. “I’m glad the administration has looked to our bill for this solution, and I thank Congressman Courtney for his leadership.”

When asked whether it helped matters that both Courtney and Cardona are from Connecticut, Courtney said, “Oh yeah, he heard about it from me.”

“Chris Soto, Cardona’s special assistant from New London, also was aware of the work my office was doing, so that is a very special connection that we in the state have with the top education official in the federal government,” Courtney said. “From the first call we had after he was confirmed and in follow-up with his staff, we were definitely making sure they were paying attention to this one. The secretary was greatly sensitive to the fact that we have the largest military installation in New England in Connecticut. One of these days we’re going to get him down to Groton, not only to talk about this but also federal impact aid that goes to Groton and Ledyard, because they have such a high school population of military kids.”

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