Costello bill would fix flaw in public service student loan forgiveness

U.S. Rep. Ryan Costello (R-PA) this month introduced legislation to remedy an error in the Public Service Loan Forgiveness (PSLF) program that if left unfixed would leave some public servants with student loan balances they had thought would be forgiven after years of timely repayment.

The PSLF Technical Corrections Act of 2017 enables loan forgiveness for teachers, first responders, social workers and other public servants who mistakenly enrolled in the wrong PSLF repayment program. The PSLF program was established in 2007 to attract students who might have forgone public service careers due to the financial burden posed by student loans. The program forgives remaining federal direct student loan balances owed by full-time workers after they have made timely loan payments for 10 years throughout their public service employment.

According to Costello’s office, the program’s complex requirements led some borrowers to believe they were making qualified payments when they were actually not doing so.

“This legislation will provide a very helpful change to the Public Service Loan Forgiveness Program that will make sure public service professionals, such as first responders and teachers, who are working to make a difference in their communities receive the student loan forgiveness they have worked towards,” said Costello, co-chair of the Public Service Loan Forgiveness Caucus.

“If borrowers are making qualifying payments for PSLF standards but mistakenly enrolled in higher repayment plans, they must be allowed to apply those payments towards loan forgiveness under PSLF. Our legislation will ensure this happens,” he added.

Reps. Brian Fitzpatrick (R-PA), John Sarbanes (D-MD) and Brendan Boyle (D-PA), who co-chairs the Public Service Loan Forgiveness Caucus with Costello, also introduced H.R. 4399.

“Rather than let good actors slip through the cracks, we’re fighting to provide relief to all those who fulfill the spirit of the program despite paperwork errors or bureaucratic complications,” Boyle said.

Fitzpatrick said he was proud to advance the measure on behalf of public servants. “The PSLF Technical Corrections Act rectifies a technical glitch causing these public servants to be burdened with excessive loan payments. This legislation will fulfill the promise made to these public servants,” he said.

The National Education Association and the American Federation of Teachers have endorsed Costello’s bill.