Public Service Loan Forgiveness: Improving the Temporary Expanded Process Could Help Reduce Borrower Confusion

In the context of high denial rates in the PSLF program, Congress appropriated $700 million in 2018 for a temporary expansion to the public service loan forgiveness program for certain borrowers who were not eligible for the original PSLF program. TEPSLF funds are available on a first-come, first-served basis. GAO was asked to review TEPSLF.

This report examines (1) the extent to which the process for obtaining TEPSLF is clear to borrowers, (2) what is known about loan forgiveness approvals and denials, and (3) the extent to which Education has conducted TEPSLF outreach. GAO analyzed data from the TEPSLF servicer on loan forgiveness requests from May 2018 through May 2019 (the most recent available at the time of our review); reviewed Education's guidance and instructions for the TEPSLF servicer; assessed Education's outreach activities; interviewed officials from Education, the TEPSLF servicer, and selected groups representing borrowers; and reviewed borrower complaints about TEPSLF submitted to Education.

The Department of Education's (Education) process for obtaining Temporary Expanded Public Service Loan Forgiveness (TEPSLF) is not clear to borrowers. Established in 2007, the Public Service Loan Forgiveness (PSLF) program forgives federal student loans for borrowers who work for certain public service employers for at least 10 years while making 120 payments via eligible repayment plans, among other requirements. In 2018, Congress funded TEPSLF to help borrowers who faced barriers obtaining PSLF loan forgiveness because they were on repayment plans that were ineligible for PSLF. Congress also required Education to develop a simple method for borrowers to apply for TEPSLF. Education established a process for borrowers to initiate their TEPSLF requests via e-mail. The agency also required TESPLF applicants to submit a separate PSLF application before it would consider their TEPSLF request. Agency officials said they established this process to quickly implement TEPSLF and obtain the information needed to determine borrower eligibility. However, the process can be confusing for borrowers who do not understand why they must apply separately for PSLF—a program they are ineligible for—to be eligible for TEPSLF. Requiring borrowers to submit a separate PSLF application to pursue TEPSLF, rather than having an integrated request such as by including a checkbox on the PSLF application for interested borrowers, is not aligned with Education's strategic goal to improve customer service to borrowers. As a result, some eligible borrowers may miss the opportunity to have their loans forgiven.

As of May 2019, Education had processed about 54,000 requests for TEPSLF loan forgiveness since May 2018, and approved 1 percent of these requests, totaling about $26.9 million in loan forgiveness (see figure). Most denied requests (71 percent) were denied because the borrower had not submitted a PSLF application. Others were denied because the borrower had not yet made 120 qualifying payments (4 percent) or had no qualifying federal loans (3 percent).

More than a year after Congress initially funded TEPSLF, some of Education's key online resources for borrowers do not include information on TEPSLF. Education reported that it has conducted a variety of PSLF and TEPSLF outreach activities such as emails to borrowers, social media posts, and new website content. However, Education does not require all federal loan servicers (who may serve borrowers interested in public service loan forgiveness) to include TEPSLF information on their websites. Further, Education's Online Help Tool for borrowers—which provides information on PSLF eligibility—does not include any information on TEPSLF. Requiring all loan servicers to include TEPSLF information on their websites and including TEPSLF information in its online tool for borrowers would increase the likelihood that borrowers are able to obtain the loan forgiveness for which they may qualify.

GAO is making four recommendations, including that Education integrate the TEPSLF request into the PSLF application, require all loan servicers to include TEPSLF information on their websites, and include TEPSLF information in its PSLF Online Help Tool. Education agreed with GAO's recommendations.

The Public Service Loan Forgiveness (PSLF) program was established in  2007 and is intended to encourage individuals to enter and continue  careers in public service. It does so by forgiving borrowers’ remaining  federal student loan balances after they have made at least 10 years of  loan payments on certain types of qualifying repayment plans while  working for certain public service employers and meeting other  requirements. After concerns were raised about high PSLF denial rates  and some borrowers facing barriers to pursuing PSLF loan forgiveness,  Congress appropriated $700 million in 2018 to temporarily expand the  PSLF program to forgive the loans of certain borrowers who did not  initially qualify.

Referred to as Temporary Expanded Public Service Loan Forgiveness  (TEPSLF), this new forgiveness is for borrowers who would have been  eligible for the PSLF program, except that they were repaying their loans  in a type of repayment plan that is not eligible for PSLF. Congress also  appropriated funds for the Department of Education (Education) to  conduct outreach to, among others, borrowers who intend to qualify for  PSLF and borrowers who may be eligible for TEPSLF because they  made payments through a repayment plan that was not eligible for PSLF.  Loan forgiveness under TEPSLF is temporarily available to borrowers on  a first-come, first-served basis. Education administers PSLF and TEPSLF  through a single loan servicer that is responsible for processing PSLF and  TEPSLF applications.

Starting in May 2018, borrowers were able to request that their federal  student loans be forgiven through TEPSLF. You asked us to review  Education’s administration of the TEPSLF process, including its outreach  to borrowers about TEPSLF.

This report examines (1) the extent to which the process for obtaining  TEPSLF loan forgiveness is clear to borrowers, (2) what is known about  TEPSLF loan forgiveness approvals and denials, and how Education  communicates with borrowers about denials, and (3) the extent to which  Education has conducted outreach to increase borrower awareness of  TEPSLF.

To address these questions, we conducted our review of TEPSLF using  the following approaches:

To examine the extent to which the process for obtaining TEPSLF  loan forgiveness is clear to borrowers, we interviewed Education  officials and the TEPSLF loan servicer’s management staff. We  examined the process for obtaining TEPSLF loan forgiveness by  reviewing: Education’s TEPSLF website, the TEPSLF servicer’s  internal handbook for processing TEPSLF requests, and Education’s  guidance and instructions to the TEPSLF servicer, including the  servicing contract, contract modifications, and emails. To understand  the borrower experience, we looked at why TEPSLF requests were  denied using data from the TEPSLF loan servicer; spoke with  Education officials, loan servicer staff, and organizations that work  with borrowers about their experiences assisting borrowers interested  in TEPSLF loan forgiveness; and reviewed borrower complaint data.  To identify relevant borrower organizations, we conducted research  on organizations representing student borrowers and emailed them to  ask if they had any experience assisting borrowers with the process  for obtaining TEPSLF loan forgiveness. We interviewed three  organizations that responded to our email inquiry. We reviewed the  112 borrower complaints related to TEPSLF that were received  through Education’s consumer complaint system and the Office of  Federal Student Aid’s (FSA) Ombudsmen from the inception of the  program through March 2019. In addition, we reviewed the 22  complaints related to TEPSLF published in the Consumer Financial  Protection Bureau online database over the same time period.  Information from our review of borrower complaints and interviews  with borrower organizations are not representative of and cannot be  generalized to all borrower experiences. We assessed Education’s  TEPSLF process against the department’s objective in its strategic  plan for fiscal years 2018 through 2022 to improve the quality of  service for customers across the entire student aid life cycle.

To examine what is known about TEPSLF loan forgiveness approvals  and denials, we analyzed the most recent available data from  Education’s TEPSLF loan servicer on the number of borrower  requests from the beginning of the program in May 2018 through May  2019. Specifically, we analyzed data on the number of TEPSLF  requests and how many were approved and denied. We also  analyzed data on the reasons why requests were denied and on the  total amount of TEPSLF loan forgiveness granted through May 2019.  We assessed the reliability of these data by reviewing data system  documentation from the TEPSLF servicer and interviewing  knowledgeable officials, and we determined that the data were  sufficiently reliable for our reporting purposes. To determine how  Education communicates with borrowers about denials, we  interviewed Education and TEPSLF loan servicer officials and  reviewed TEPSLF denial letters and information on Education’s  website about options for borrowers who want to contest the  determinations made on their TEPSLF requests.

To assess the extent to which Education has conducted outreach to  increase borrower awareness of TEPSLF, we asked Education for  documentation describing their outreach activities, reviewed  Education’s and the TEPSLF servicer’s outreach communications to  individual borrowers, and their online outreach information. We  reviewed Education’s and all federal student loan servicers’ websites  to determine what TEPSLF information was available to borrowers  online. We interviewed Education officials and the TEPSLF loan  servicer’s management staff about their outreach efforts. We  assessed Education’s outreach efforts against the department’s  strategic plan objective for fiscal years 2018 through 2022 to improve  the quality of service for customers across the entire student aid life  cycle, and federal internal control standards for communication with  external stakeholders.

For all objectives, we also reviewed relevant federal laws and regulations.  In addition, at the time of our review, there was ongoing litigation related  to TEPSLF. Therefore, we scoped our study to minimize overlap with issues pending in that litigation. As a result of this approach, our findings  do not draw any conclusions about how individual borrowers may have  been affected by any of the issues addressed in this report. Shortly before  issuing this report, additional lawsuits related to TEPSLF were filed in July  2019.

We conducted this performance audit from January 2019 to September  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Education administers federal student aid programs, including the William  D. Ford Federal Direct Loan (Direct Loan) program, through the Office of  Federal Student Aid. Only Direct Loans are eligible for the TEPSLF and  PSLF programs. Under the Direct Loan program, Education issues and  oversees federal loans provided to students and contractors service these  loans. Education currently contracts with nine loan servicers that each  handle the billing and other services for a portion of the over $1 trillion in  outstanding student loans provided through the Direct Loan program.  These servicers track and manage day-to-day servicing activities.  Education contracts with a single loan servicer to implement PSLF and  TEPSLF, which includes responding to borrower inquiries, reviewing  requests for loan forgiveness, and processing loan forgiveness for  qualifying borrowers. Borrowers interested in pursuing loan forgiveness  under either PSLF or TEPSLF must have their loans transferred to this  loan servicer in order to proceed.

TEPSLF is a temporary expansion of the PSLF program and the eligibility  requirements for TEPSLF are largely the same as those of the PSLF  program with a few key exceptions. Both provide eligible borrowers with  forgiveness on the remaining balance of their Direct Loans after they  have met all program requirements. To receive forgiveness for a loan  under either PSLF or TEPSLF, borrowers are required to be employed in  a public service job for 10 years when making 120 qualifying payments, at  the time they apply for forgiveness, and at the time they receive  forgiveness for their loans. Specifically, borrowers are generally required  to:

Work full-time for at least 10 years at a public service organization, a government organization, agency, or entity at any level (federal,  state, local, or Tribal); a nonprofit, tax exempt organization (under section 501(c)(3) of  the Internal Revenue Code); or another private nonprofit organization that provides certain public  services.

Make 120 on-time monthly loan payments for the full amount due on  their bill. These monthly payments do not need to be consecutive.

Key differences between PSLF and TEPSLF include:

Qualifying repayment plans. PSLF generally requires borrowers to  repay their loans through one of the eligible income-driven repayment  plans or the Standard repayment plan. TEPSLF allows borrowers to  qualify for loan forgiveness through several additional types of  repayment plans that do not qualify for PSLF, including the Graduated  repayment plan, Extended repayment plan, Consolidated Standard  repayment plan, and Consolidated Graduated repayment plan.

Funding. TEPSLF loan forgiveness is temporarily available to  borrowers on a first-come, first-served basis until the $700 million is  expended. The PSLF program will continue unless repealed by  Congress.

Specific payment requirements. For TEPSLF, the following two  payments generally must be at least as much as the borrower would  have paid under an income-driven repayment plan: (1) the payment  made immediately prior to applying for TEPSLF, and (2) the payment  made 12 months prior to applying for TEPSLF.

In the context of high denial rates in the PSLF program and evidence that  some borrowers were being misinformed by loan servicers about which  repayment plans would qualify for PSLF, Congress appropriated $4.6  million for Education to conduct outreach on PSLF and TEPSLF. The  legislation called for this outreach to be targeted to, among others,  borrowers who would qualify for PSLF loan forgiveness except that they  have made some or all of their payments through plans that do not  qualify.

Education’s Temporary Expanded Loan Forgiveness Process Is Not Clear to Borrowers

Congress directed Education to implement a simple method for borrowers  to apply for TEPSLF within 60 days after the legislation funding the  program was enacted. In response, Education established a process in  which borrowers send an email to the TEPSLF loan servicer with their  name and date of birth to initiate their TEPSLF review and establish their  place in line for TEPSLF funds. In addition to sending an email to initiate  a TEPSLF request, Education requires that a borrower has submitted a  PSLF application before they can be considered for TEPSLF (see fig. 1).  While a PLSF application is not explicitly required by statute for a  borrower to be considered for TEPSLF loan forgiveness, Education  officials said that the department added this step to the process because  the PSLF application form captures information the TEPSLF loan servicer  needs to determine a borrower’s eligibility for TEPSLF. Education  officials said that they added this step in order to roll out the TEPSLF  program within the required 60 days.

Education’s TEPSLF website states that borrowers interested in this  temporary expanded loan forgiveness option must submit a PSLF  application in order to be considered for TEPSLF. Even with this  information, our review of TEPSLF loan servicer data found that 71  percent of denied TEPSLF requests were denied because the borrower  had not submitted a PSLF application. Education officials said that they  believed that many borrowers send a TEPSLF request without submitting  a PSLF application because TEPSLF funding is temporary and borrowers  know that sending the email request will hold their place in line for the  limited funds. However, borrowers who have not submitted the PSLF  application are sent a denial letter from the TEPSLF loan servicer.  According to Education officials, these borrowers would lose their place in  line and have to reapply if they want to be reconsidered for TEPSLF.

Officials from Education, the TEPSLF loan servicer, and representatives  from selected organizations representing student borrowers all said that  the requirement to submit a PSLF application to be eligible for TEPSLF  loan forgiveness can confuse borrowers. For example, Education officials  acknowledged that the majority of TEPSLF requests come from  borrowers who have not first submitted a PSLF application, and officials  from the TEPSLF loan servicer said that borrowers who called were  frequently confused when they received a TEPSLF denial based on the  fact that they had not first submitted the PSLF application. In addition,  representatives from the three student borrower groups we interviewed  said that having to apply for PSLF before requesting TEPSLF often  confuses borrowers and, in the opinion of officials from two of the three  groups, leads directly to large numbers of TEPSLF denials. We also  found some examples of borrower confusion about the PSLF application  requirement in our review of borrower complaints. In three TEPSLF  borrower complaints filed with Education that we reviewed, the borrowers  expressed confusion and frustration about why they were being asked to  submit an application for a program—PSLF—they knew they did not  qualify for in order to receive TEPSLF loan forgiveness.

Education’s policy of requiring all borrowers requesting TEPSLF to first  submit a PSLF application has created a confusing process for  borrowers. Education officials said that integrating the TEPSLF request  into the PSLF application—for example, by including a checkbox that  borrowers could use to request a TEPSLF review if the loan servicer finds  they are ineligible for PSLF—would eliminate the need for borrowers to  take multiple steps, reduce the number of borrowers who are denied, and  improve service to borrowers. Education officials estimated that  integrating the TEPSLF request into the existing PSLF process would  require roughly a year in order to revise the PSLF application form,  borrower communications, and program procedures, and to work with the  loan servicer to implement new contractual requirements. Education  officials told us that they will be implementing a new online portal in fall  2019 to provide better overall service to borrowers. They also stated that  the new portal could incorporate an online integrated PSLF and TEPSLF  application if they had sufficient resources and time, but that there were  currently no specific plans to do so.

While Education rolled out the process for requesting TEPSLF loan  forgiveness in 2 months, it has not created a borrower-friendly TEPSLF  process. This does not align with Education’s strategic plan objective to  improve the quality of service to customers across the student aid life  cycle. Further, Congress created the temporary expansion to the PSLF  program to help certain borrowers who faced barriers obtaining PSLF  loan forgiveness and required Education to develop a simple method for  borrowers to apply for TEPSLF. While initiating a TEPSLF request  through an email is straightforward, requiring borrowers to have submitted  a PSLF application to successfully pursue TEPSLF loan forgiveness is  confusing and inefficient for borrowers because borrowers must take  multiple steps and complete an application for a program they do not  qualify for. If Education were to allow borrowers to request TEPSLF loan  forgiveness through an integrated application form, it would improve  service to borrowers, reduce borrower confusion about how to obtain loan  forgiveness, and better align with its strategic plan objective to improve  service to borrowers. Further, although TEPSLF is a temporary  opportunity, it could be years before the $700 million appropriation is  exhausted, and it is therefore worthwhile for Education to invest  resources in improving the process now.

Ninety-nine Percent of Borrowers’ TEPSLF Requests Have Been Denied and Certain Denial Letters Do Not Include Important Information

Education Has Approved 1 Percent of TEPSLF Loan Forgiveness Requests and Spent 4 Percent of TEPSLF Loan Forgiveness Funds in a Year

From May 2018 through May 2019, about 40,000 borrowers submitted  TEPSLF requests for loan forgiveness and Education has approved or  denied about 54,000 separate TEPSLF requests. Education has  approved 1 percent (661) and denied 99 percent (53,523) of these  requests, according to the most recent data from the TEPSLF loan  servicer (see fig. 2).

Of the 53,523 denied TEPSLF requests, about 38,000 were ineligible for  consideration and were therefore denied because the borrower had not  submitted a PSLF application, according to data from the TEPSLF loan  servicer. Of the remaining denied requests, about 15,000 were denied  because they did not meet other program requirements (see fig. 3).

As we previously noted, under the current TEPSLF review process, the  loan servicer first checks to see if the borrower requesting TEPSLF has  submitted a PSLF application. If the borrower has not done so, the loan  servicer does not conduct any further review of the borrower’s request  and sends the borrower a denial letter informing them they have to submit  the PSLF application before the borrower can be considered for TEPSLF.  Without the loan servicer conducting any further review of a borrower’s  request, it is impossible to know how many of the roughly 38,000  requests that were denied because the borrower had not yet submitted a  PSLF application would have otherwise met all other program  requirements and been approved for TEPSLF loan forgiveness. The large  number of TEPSLF requests denied for not submitting a PSLF application  provides further evidence that many borrowers may be confused about  the process for obtaining TEPSLF loan forgiveness. Further, more than  5,000 (about 10 percent) of the TEPSLF requests were denied because  the borrower had not been repaying their loans for at least 10 years,  which indicates that they had not yet made 120 qualifying payments—a  straightforward program requirement.

Since TEPSLF became available in May 2018, Education has approved  TEPSLF loan forgiveness totaling about 4 percent (approximately $26.9  million) of the $700 million appropriated for TEPSLF loan forgiveness,  according to the most recent data available from the TEPSLF loan  servicer at the time of our review (see fig. 4). Of the 656 borrowers  approved for TEPSLF loan forgiveness, the borrowers received an  average of about $41,000 in loan forgiveness, with loan forgiveness  amounts ranging from about $190 to about $227,000.

Education Does Not Fully Inform Borrowers about Available Options to Contest Denial Decisions

Education does not provide complete information to borrowers about  options they have to contest a denied TEPSLF request. Specifically, the  letter the TEPSLF loan servicer sends to the borrower communicating a  decision to deny the TEPSLF request includes the reason for the denial  and the TEPSLF loan servicer’s customer service number for borrowers  to call with questions. An FSA official told us that while there is no formal  process for borrowers who are dissatisfied with their TEPSLF or PSLF  determinations to contest them, borrowers do have additional options for  addressing concerns, such as an additional review by the TEPSLF  servicer, or a complaint to the FSA Feedback System or Ombudsmen  (see fig. 5).

According to Education officials, when a borrower is denied loan  forgiveness, they can call the TEPSLF loan servicer’s customer service  number with questions about the denial. TEPSLF servicer officials said  that if the customer service representative is unable to resolve the  borrower’s questions, the representative can elect to elevate the  borrower’s concern internally within the TEPSLF loan servicer, which may  result in a second review by loan servicer management. Education and  TEPSLF loan servicer officials said that borrowers who are not able to  resolve their issues with the loan servicer can bring their issues directly to  Education. Specifically, if a borrower is dissatisfied with their TEPSLF  decision, they can submit their concern through the online FSA Feedback  Tool. Borrowers can also contest the decision with the FSA Ombudsman  Group.

Education officials told us it does not provide information about these  options in its denial letters or on its TEPSLF website, noting that  borrowers could find this information at the bottom of FSA’s main website.  Education officials also stressed the importance of borrowers resolving  their concerns first with their loan servicer directly before pursuing other  avenues, and said that this is part of the reason why they do not include  this information in letters sent to borrowers. All TEPSLF denial letters  include a statement at the bottom of the letter indicating that if borrowers  had questions about the information in their denial letter, they should call  the general customer service number at the TEPSLF loan servicer for  assistance. The letters did not explain how the servicer could potentially  do a second review or subsequently refer the matter to Education.  Information about the potential for a second review at the loan servicer  and the option to raise an issue with Education directly would help  borrowers who are unable to resolve their concerns by calling the general  customer service number at the loan servicer.

Additional information on options for contesting decisions is not  necessary for all TEPSLF borrowers who are denied. For example, it may  not be appropriate to include this information in denial letters sent to  borrowers who do not meet basic program requirements—for example,  those who have no federal Direct Loans. However, borrowers who are  denied for reasons that are more prone to error, such as having fewer  than 120 qualifying payments, are not made aware of all the available  options so they can make informed decisions about how to best resolve  their concerns. We previously reported that Education does not ensure  that the loan servicer responsible for PSLF and TEPSLF is receiving  consistent loan payment history information from other loan servicers,  increasing the risk of inaccurate qualifying payment counts. This also  raises the risk of inappropriate denials for TEPSLF. Our review of  TEPSLF complaints made to Education from borrowers found eight  examples of borrowers contesting the loan servicer’s determination of the  number of qualifying payments. In six of these instances, the TEPSLF  servicer determined that the borrowers were correct and had met  requirements for loan forgiveness. Given the risk of denial errors,  additional information about options for borrowers who are dissatisfied  with their TEPSLF denial determination is especially important.

While there is information about options for contesting decisions at the  bottom of FSA’s main website, it is not incorporated into the TEPSLF website and borrowers may not know where to find this information.  Federal internal control standards for external communication with  stakeholders call for communication of quality information with external  parties to achieve program objectives. Providing this information in  relevant denial letters and Education websites will increase the likelihood  that borrowers with valid concerns will have their TEPSLF requests  appropriately resolved.

Education Contacts Certain Borrowers Directly about TEPSLF, but Its General TEPSLF Outreach Activities Are Limited

Education Conducts Direct Outreach to Certain Individual Borrowers

Education and the TEPSLF loan servicer conduct direct outreach to  certain borrowers about TEPSLF. For example, when TEPSLF was first  rolled out, Education sent a notice to over 1,000 borrowers who had been  denied PSLF due to a lack of 120 qualifying payments, but who had been  in repayment for at least 10 years. Education officials told us that they  had identified this group of borrowers as the most likely to be eligible for  TEPSLF. This notice informed borrowers of the new TEPSLF loan  forgiveness opportunity and told them how to apply for it. Education  officials told us that they continue to review the PSLF denial list on a  weekly basis and send notices to those whom they have determined to be  the most likely to qualify for TEPSLF loan forgiveness. In addition,  borrowers who have previously expressed interest in TEPSLF by sending  an email to request TEPSLF loan forgiveness will be sent a TEPSLF  outreach letter by the TEPSLF loan servicer under certain conditions: after submitting a new employment certification form, or after submitting a new PSLF application that is subsequently denied.

In these two circumstances, the TEPSLF loan servicer sends the  borrower a letter suggesting that they may now be eligible for TEPSLF  loan forgiveness and would need to re-request such loan forgiveness.

Education’s General TEPSLF Online Outreach Is Limited

Education officials told us that the agency has focused on a broad,  general outreach strategy; however, we found that its online information is  limited because TEPSLF information is not included in several key online  sources. Education and TEPSLF loan servicer officials told us that they  primarily direct borrowers to online sources to inform them about TEPSLF  requirements. For example, Education has created a TEPSLF-specific  website and the TEPSLF loan servicer’s website references the TEPSLF  opportunity and links to Education’s TEPSLF website if borrowers would  like more information.

However, we found that while all nine of the loan servicers’ websites  contain some information on the PSLF program, none of them (other than  the TEPSLF loan servicer) included TEPSLF information on their  websites or provided a link to Education’s TEPSLF website. While  Education officials told us that only the TEPSLF servicer is required to  have TEPSLF information on its website, other loan servicers may also  serve borrowers who are potentially eligible but may be unaware of  TEPSLF. In addition, borrowers with other loan servicers who are  interested in TEPSLF may not be aware that they have to transfer to the  TEPSLF loan servicer to obtain loan forgiveness.

Further, according to agency officials, Education’s PSLF Online Help Tool  also does not include any TEPSLF information, and Education has not  created a similar tool for TEPSLF. Education officials told us that the  PSLF Online Help Tool, which assists borrowers with determining  whether their loans and employment qualify and which PSLF forms they  need to submit, is one of the primary PSLF outreach mechanisms to  inform borrowers about PSLF eligibility. According to Education data,  since the rollout of the online tool in December 2018 through the  beginning of March 2019, about 340,000 users have used the online tool,  and about 100,000 have logged on and have collectively generated about  40,000 PSLF-related forms, such as PSLF application forms. However,  according to Education officials, the online tool does not include any  information on TEPSLF. Education officials stated that the first phase of  the Online Help Tool was focused on informing borrowers about eligibility  requirements for PSLF and that as the department makes enhancements  to phase two of the Online Help Tool, it could consider adding TEPSLF  information and functionality. Both FSA and TEPSLF loan servicer  officials stated that having information on TEPSLF integrated into the  PSLF Online Help Tool would be beneficial for borrowers and would  reduce confusion about TEPSLF. Federal internal control standards state  that management should externally communicate the necessary quality  information to achieve the entity’s objectives. Including TEPSLF  information in the PSLF Online Help Tool and noting it on all loan servicer  websites could increase borrower awareness of TEPSLF and the  likelihood that borrowers are able to take advantage of this opportunity.

The loan forgiveness opportunity through TEPSLF is an expansion of the  PSLF program and helps borrowers who hoped to qualify for PSLF but  who did not realize they were in an ineligible loan repayment plan.  Instead of integrating the expanded loan forgiveness opportunity into the  existing PSLF process, Education required borrowers to have submitted a  separate PSLF application before the loan servicer will consider a  borrower’s TEPSLF request. The large number of requests denied  because borrowers had not submitted a PSLF application suggests that  borrowers are confused about this requirement. In some cases, these  borrowers may have been working in public service jobs for years  believing they were on track for loan forgiveness, only to find out later that  they did not qualify. While the loan forgiveness opportunity through  TEPSLF is only available until the $700 million in funding has been spent,  a relatively small amount of total funding has been spent so far. It is  possible that the program could continue for years, supporting the case  for investing in improvements to the process now. Integrating the process  for obtaining loan forgiveness through TEPSLF into the PSLF application  would be easier for borrowers and help Education meet its goal to  improve customer service.

Information provided in TEPSLF denial letters and on the TEPSLF  website does not explain what options are available to borrowers if they  want to contest the loan servicer’s determination. While additional  information on this topic is not necessary for borrowers who do not meet  basic program requirements—for example, those who have no qualifying  federal loans—this information would help certain borrowers whose  TEPSLF requests may have been denied. By including this additional  information on the TEPSLF website and in denial letters to these  borrowers, the borrowers can then pursue additional options to contest  the denial and help Education avoid denial errors.

Finally, Congress provided funding and tasked Education with conducting  outreach to borrowers to help increase overall borrower awareness of the  public service loan forgiveness programs. While Education has engaged  in some outreach activities, Education is missing opportunities to reach  out to borrowers potentially eligible for TEPSLF—specifically, by not  requiring all loan servicers’ websites to include information about TEPSLF  and not including TEPSLF information in the PSLF Online Help Tool.  TEPSLF was created to provide relief to a group of borrowers who were  ineligible because they were repaying their loans on repayment plans that  were not eligible for the original PSLF program. Without improved  TEPSLF outreach in these two areas, however, many of these borrowers  who were initially unable to qualify for the PSLF program may be unaware  of the TEPSLF opportunity that was designed to help them.

We are making the following four recommendations to Education’s Office  of Federal Student Aid:

The Chief Operating Officer of the Office of Federal Student Aid  should integrate the TEPSLF request into the PSLF application, for  example, by including a checkbox on the PSLF application, to provide  borrowers a more seamless way to request TEPSLF consideration.  (Recommendation 1)

The Chief Operating Officer of the Office of Federal Student Aid  should provide certain borrowers, for example, those who are denied  TEPSLF for not having 120 qualifying payments, with more  information about options available to contest TEPSLF decisions on  the TEPSLF website and in their denial letters. (Recommendation 2)

The Chief Operating Officer of the Office of Federal Student Aid  should require all loan servicers to provide TEPSLF information on  their websites. (Recommendation 3)

The Chief Operating Officer of the Office of Federal Student Aid  should include TEPSLF information in its PSLF Online Help Tool.  (Recommendation 4)

We provided a draft of this report to Education for its review and  comment. In its comments, reproduced in appendix I, Education  concurred with each of our recommendations and identified steps it plans  to take to implement them. To make the TEPSLF loan forgiveness  process easier for borrowers, Education stated that it will integrate the  TEPSLF request into the PSLF application as part of the improvements  planned for the PSLF application under its new online interface for  student borrowers. Regarding our recommendation to provide certain  borrowers with more information about options available to contest  TEPSLF decisions, Education stated that it will add information for  borrowers on the procedures for contesting TEPSLF decisions to FSA’s  specific TEPSLF website and in relevant TEPSLF denial letters. To  improve outreach and help increase overall borrower awareness of  TEPSLF, Education stated it will require all loan servicers to provide  TEPSLF information on their websites within 120 days. In addition,  Education stated that it will also include TEPSLF information in the PSLF  Help Tool. We also provided relevant report sections to the TEPSLF loan  servicer for technical comments. The TEPSLF servicer provided technical  comments, which we incorporated as appropriate.

We are sending copies of this report to relevant congressional  committees, the Secretary of Education, and other interested parties. In  addition, the report will be available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (617) 788-0534 or emreyarrasm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix II.

Appendix I: Comments from the Department of Education

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Michelle L. St. Pierre (Assistant  Director), Nora Boretti (Analyst-In-Charge), and Aaron Karty made  significant contributions to this report. Also contributing to this report were  James E. Bennett, Deborah Bland, Alicia P. Cackley, Marcia L. Carlsen,  Linda A. Collins, William W. Colvin, Alex Galuten, Sheila R. McCoy, Jean  L. McSween, Jessica S. Orr, Debra Prescott, and Ashanta Williams.

Public Service Loan Forgiveness: Education Needs to Provide Better  Information for the Loan Servicer and Borrowers. GAO-18-547.  Washington, D.C.: Sept. 5, 2018.

Federal Student Loans: Further Actions Needed to Implement  Recommendations on Oversight of Loan Servicers. GAO-18-587R.  Washington, D.C.: July 27, 2018.

Federal Student Loans: Education Could Improve Direct Loan Program  Customer Service and Oversight. GAO-16-523. Washington, D.C.: May  16, 2016.

Federal Student Loans: Key Weaknesses Limit Education’s Management  of Contractors. GAO-16-196T. Washington, D.C.: Nov. 18, 2015.

Federal Student Loans: Education Could Do More to Help Ensure  Borrowers Are Aware of Repayment and Forgiveness Options.  GAO-15-663. Washington, D.C.: Aug. 25, 2015.

The Public Service Loan Forgiveness program is one way to encourage public service. It forgives federal student loan balances for eligible borrowers who have made 10 years of payments while in certain public service jobs.

In 2018, after few loans were forgiven, Congress temporarily expanded the program to include more borrowers. But some borrowers may not know about the temporary program because most loan servicers’ websites don’t have information on it. Also, applying is a potentially confusing multi-step process.

Our recommendations are to make more information available and combine application steps to make it less confusing for borrowers.