Katy Punch, a dedicated librarian from North Carolina, has been navigating the complexities of the Public Service Loan Forgiveness (PSLF) program for over a decade. After years of having served with her all-star team, she now finds herself buried under an avalanche of new applications. Her application for forgiveness is currently in limbo. It’s been eight months since Punch filed her PSLF buyback application. She still has not been given notice, leaving her in a financially precarious situation.
The PSLF program was created in 2007 when President George W. Bush signed the legislation into law. It provides for the cancellation of eligible not-for-profit and government employees’ federal student loans after 120 qualifying payments – the equivalent of ten years of public service employment. As of the end of June, more than 65,448 PSLF buyback requests are still awaiting adjudication by the U.S. Department of Education. Recent staffing cuts have further exacerbated this situation.
In March, the Department also enacted its own mass layoffs, laying off half of its workforce. This extreme step has many borrowers such as Punch left in limbo stripped of their dignity, respect, and ability to plan while they process their application. “With the layoffs, there are fewer staff to review, calculate buyback payments and process applications for borrowers,” said Stephanie Sampedro, a former employee of the Education Department.
Punch was only five years of payments from paying off her about $30,000 student debt. She experienced her own frustration when the Biden administration funneled borrowers into SAVE forbearance. “I will gladly pay the five months, but the Department of Education will not let me,” she stated.
The Biden administration has toughed-out the PSLF buyback program. This new approach lets borrowers “purchase” their access into the program. Critics say it has become a political weapon. They think it’s just not really working for the people who need help the most. Ellen Keast, an education expert, remarked, “The Biden Administration introduced the Public Service Loan Forgiveness buy-back program to allow borrowers to ‘buy’ eligibility into the program — weaponizing a legal discharge plan for political purposes.”
That backlog is increasing at an alarming rate. That new tidal wave brings into question the federal government’s ability to assist working people who need relief from student debt. Higher education expert Mark Kantrowitz noted that “it is inappropriate for the U.S. Department of Education to slow-walk the forgiveness.” This was a massive complication brought on by the Trump administration’s mass terminations. As of last May, almost 59,000 applications were pending and that figure has only increased.
The emotional toll on borrowers that has come from this three month waiting period should not be sidelined. “It feels like I’m having the rug pulled out from under me when I was so close to the finish line,” Punch expressed. She has spent her life in the service of public libraries. Now she’s convinced she’s entitled to the financial relief that was promised to her.