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May 16, 2019

ABA Fights to Preserve Public Service Loan Forgiveness Program

The White House’s Fiscal Year 2020 budget proposal to reform the education system would eliminate the Public Service Loan Forgiveness (PSLF) program.

The White House’s Fiscal Year 2020 budget request proposes to eliminate the Public Service Loan Forgiveness (PSLF) program, stating it unfairly favors some career choices and is complicated for borrowers to navigate. Instead, the administration intends to focus student loan assistance on needy undergraduate student borrowers from all professions and simplify the repayment process. The American Bar Association (ABA) opposes the administration’s proposal because it would adversely affect access to justice in communities across the country and is fighting to preserve the PSLF program.

The federal PSLF program, created in 2007, eliminates student debt for certain non-profit and government employees after ten years of qualified public service and eligible loan repayments. Public service often requires advanced degrees for professional licensure – for prosecutors, veterinarians, public defenders, legal aid lawyers, doctors, nurses, teachers, and many more. Graduates with these credentials often emerge saddled with crushing student loan debt.

Prior to the PSLF program, there was a glaring lack of incentives for professionals to work in the public sector. Graduating professionals were drawn to high-paying private sector work, and local communities struggled to fill other positions. In many cases, high debt, combined with the pay discrepancy between the public and private sectors, were a direct barrier to public service, especially for lawyers.

The National Association for Law Placement (NALP) reports that a significant number of law school students interested in public service are deterred from public service careers because of their education debt. A joint study between Equal Justice Works and NALP in 2002, surveying 1,622 law school students from 117 schools, concluded that 66% of students interested in public service saw loan debt as the primary factor preventing them from government or pro bono careers. That number has increased in recent years with the higher levels of student debt and relatively lower salaries for public servants.

Responding to the cry of communities in need, the PSLF program has encouraged lawyers to pursue public service jobs that support their communities and nation by alleviating the burden of their heavy student loan debt. In fact, a November 2017 survey by the National Legal Aid and Defender Association consisting of 3,369 justice system lawyers found that 87% of them were “much more likely” to accept job positions that qualify for PSLF. Over 50% of these lawyers were “very likely” or “certain” to leave their jobs if they did not qualify for the program.  

Some lawyers serving in public service positions have also encountered problems in applying for or receiving PSLF. The Department of Education administers the program, but out of the 49,669 applications submitted for loan forgiveness between the program’s inception and September 2018, only 423 were approved. Applications for the program have had less than a one percent chance of approval; most of the applications were denied based on technicalities involving the type of loan, repayment program, or employer status. Efforts to clarify eligibility for the program benefits or to overturn Education Department decisions have led to lawsuits, including one by the American Bar Association that is still ongoing.

At this point, members of the 116th Congress are getting more involved. Last month, Senators Kirsten Gillibrand (D-NY) and Tim Kaine (D-VA) introduced S. 1203, What You Can Do for Your Country Act of 2019, along with 18 cosponsors. This Democratic-led bill makes all federal student loans and repayment plans eligible for public service loan forgiveness and simplifies the approval and application process. The bill also offers 50 percent student loan forgiveness after five years. Representatives John Sarbanes (MD-3) and Mark DeSaulnier (CA-11) introduced an identical bill in the House of Representatives several weeks later with five Democratic cosponsors (H.R. 2441).

As Chair of the Senate Committee on Health, Education, Labor, and Pensions, Senator Lamar Alexander (R-TN) announced in February an intention to consider in the spring a bipartisan comprehensive higher education bill that streamlines the loan application and repayment system. If the Senate passes such a bill this summer, then negotiations with the House could occur in the fall with a final bill possible by the end of the year.   At that time, Senator Alexander evinced a priority choice of undergraduate education—and particularly the first two years of college—over graduate education. Senator Alexander did not mention publicly what his bill would mean for the PSLF program, but his committee staff has been considering the termination of loan forgiveness. It is notable that last year negotiations to reauthorize the Higher Education Act in the House failed mainly due to opposition to efforts to eliminate the PSLF program.

The ABA’s extensive history of support for public service and instrumental work in the creation of the PSLF program in 2007 has helped allow law school graduates to pursue public service careers. Rather than steering students away from government and pro bono work, the ABA has advocated for a system that enables lawyers to accept public service positions and simultaneously helps communities across the country get the professional services they need despite the lower-paying wages often involved. The ABA will continue to fight to preserve public service loan forgiveness options for legal professionals and thereby help ensure access to affordable justice in communities in need of help.

Add your voice to the ABA’s advocacy efforts to preserve the PSLF program by clicking here. Follow us on Twitter @ABAGrassroots to watch for further developments.