WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.) today applauded the Biden-Harris Administration’s proposed overhaul of the Public Service Loan Forgiveness (PSLF) program, which has long been riddled with confusing and restrictive requirements and plagued by mismanagement issues since its inception in 2007. Some of the proposed changes will help ensure borrowers who were misinformed or whose student loans were mismanaged by student loan servicers qualify for PSLF forgiveness, including allowing borrowers mistakenly enrolled in disqualified repayment plans to count their previously ineligible payments toward forgiveness. Senator Menendez has repeatedly advocated that the Consumer Financial Protection Bureau and the Department of Education conduct strong oversight over student loan servicers who consistently mismanage the PSLF program.
“For years, I have advocated for a top-down reform of the Public Service Loan Forgiveness program to ensure that public service workers can better access critical loan forgiveness assistance designed to help workers who have committed their careers to serving the people of this country,” said Sen. Menendez. “For too long, countless public service workers have been locked out of critical loan forgiveness assistance due to confusing eligibility requirements, paperwork hurdles, and administrative errors. That’s why I am thrilled the Biden-Harris Administration is taking the necessary steps to overhaul this loan forgiveness program that should be helping public service workers pursue their passion for helping others, not adding an additional barrier for individuals committed to serving our country.”
As a senior member of the Senate Committee on Banking, Housing and Urban Affairs, Sen. Menendez has been a long-time advocate for student loan borrowers drowning in student loan debt. Together with Sen. Elizabeth Warren (D-Mass.), Sen. Menendez secured inclusion of their bill, the Student Loan Tax Relief Act, as a provision in the American Rescue Plan. This provision made any college loan forgiveness tax-free, ensuring borrowers whose debt is fully or partially forgiven are not saddled with thousands of dollars in surprise taxes. The average student borrower who earns $50,000 in income would save approximately $2,200 in taxes for every $10,000 of forgiven student loans. This student loan tax relief legislation paves the way for President Biden to cancel at least $50,000 in federal student loan debt.
Earlier this year, Sen. Menendez and several of his colleagues urged the U.S. Department of Education to expand debt relief for student loan borrowers, including closing donut holes and improving eligibility for the Public Service Loan Forgiveness and Temporary Expanded Public Service Loan Forgiveness programs. Sen. Menendez also led efforts to hold the Trump-appointed CFPB Director accountable for not protecting student loan borrowers, especially for public service workers. The troubled loan forgiveness program for public service workers had been rejecting 99% of individuals who thought they had met the program’s requirements. And in 2019, Sen. Menendez joined Sen. Sherrod Brown (D-Ohio)requesting Trump’s CFPB to immediately open an enforcement investigation into the Pennsylvania Higher Education Assistance Agency’s (PHEAA) mismanagement of the PSLF program.