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Melissa Harris-Perry: It's The Takeaway and I'm Melissa Harris-Perry. Now, payments for federal student loans have been paused since March 2020, and after multiple extensions looks like they're scheduled to restart September 1, 2022. Welcome back to school y'all. Now, Present Biden. Hasn't said whether he plans to extend that pause, or if he's made the decision to cancel up to $10,000 of student loans for borrowers., but while we're waiting on those answers, it's a federal program that has already promised loan forgiveness to an estimated 9 million public service workers with federal student loans.

In 2007, Congress created the Public Service Loan Forgiveness program to help incentivize people to work in the public sector, and the program promised to forgive student loans for eligible employees after 120 payments over 10 years, but in reality, never really quite worked like that. When the first wave of employees were due to qualify for forgiveness in 2018, the Department of Education reported that just 1% or only 423 out of nearly 50,000 applications received were approved. Tens of thousands of other applications were just denied mostly due to complicated eligibility requirements and administrative missteps. Some of you told us that you've struggled with this forgiveness program as well.

Andrew: This is Andrew in Palm Desert, California. As my wife completed her bachelor's and master's degrees, we amassed $30,000 of student debt. She taught for 15 years only in schools with at least 90% title one students, but her loans came during gaps in the forgiveness legislation. She received zero loan forgiveness. We were paid the last $10,000 when we retired and sold our home.

Kim Watts: My name is Kim Watts. I'm a school teacher, have a tremendous student loan debt and I have struggled with the paperwork. I have paid companies for the paperwork, for the loan forgiveness. The rules keep changing, I just got a letter this week that says I have to do something else, but it refers me to a website. The website doesn't take you straight to a place. You have to know what you're looking for. It's a nightmare. I don't know what else to say other than I have a debt that I will die with.

Melissa Harris-Perry: As always, we so appreciate all of you who call and share with us. Now, to try and address these problems, last October, the Department of Education announced temporary reforms that they hope will make it easier for public sector workers to have their student loans forgiven. The Department is urging people to apply or even reapply for forgiveness with this waiver, and just last week, Democratic House Representative, Joe Courtney introduced a bill that would make many of these changes permanent. For more on this, I'm joined by Kat Welbeck, she is Director of Advocacy & Civil Rights Counsel at the Student Borrower Protection Center. Thanks for being here, Kat.

Kat Welbeck: Thanks soo much for having me. I'm so happy to be here.

Melissa Harris-Perry: Look, maybe I'm happy for you to be here too, but I want to understand a little bit better. Let's talk first about some of the problems and then let's talk about what might be some of the fixes here. How do we end up with the situation where only 1% of those who applied for forgiveness were actually granted forgiveness?

Kat Welbeck: This program as you mentioned, has been around since October 2007. Since that time, what we've seen is so much Server Service Management, and so student loan, servicers are the people who take your student loan payments. They're responsible for telling you what rights and benefits you have with your loan and is supposed to tell you what's supposed best repayment plan that you're supposed to be on really supposed to help guide you through this practice, but what we've seen is over years between a lot of service management and just administrative struggles that people haven't gotten access to this program.

Whether that's people working in public service and not being told that they have access to Public Service Loan Forgiveness or affordable loan payments through income-driven repayment. Sometimes people were not told that they needed to consolidate older loans that they had, but also the way the program worked when you consolidated your older loans to get into the right loan to be in this program, you lost all of your previous payment history to get towards your hundred and 20 payments. A lot of times, a really hard decision for people to make in terms of deciding if they wanted to be in PSLF.

Then just sometimes there were miscalculations of how many payments people actually had or just people not being given credit for payments because they may have been a couple of days past the grace period, or they might have just underpaid by just a little bit. What we just saw is there were a lot of administrative burdens and hurdles that keep kept people from getting access to this program. That really just went against the spirit of the program. If you work for 10 years in public service and you're paying all your student loans and you should have access to that cancellation.

Melissa Harris-Perry: All right. What counts as working in public service? What kinds of jobs?

Kat Welbeck: This is a lot broader than I think sometimes people realize. Public Service Loan Forgiveness, that includes not only 501(c)(3) nonprofits, but it's also people who work for any local federal state or tribal government. It also includes certain emergency services, so people who work in health professions and also emergency services, for example, firefighters, police forces like EMTs. It covers a lot of people.

One thing I also like to note is for the purposes of program, you have to be employed full-time, but the Department of Education either counts that as full-time as defined by your employer or 30 hours a week. A lot of times you also see people who work maybe 15 hours at one nonprofit, maybe 15 hours in another qualifying service, and are able to qualify for Public Service Loan Forgiveness, so you are able to also count part-time work that is within a qualifying employer.

Melissa Harris-Perry: Let's take a quick pause. We're going to have more on Public Service Loan Forgiveness program in just a moment. This is The Takeaway. Back with you on The Takeaway. I'm Melissa Harris-Perry, continuing my conversation with Kat Welbeck, Director of Advocacy & Civil Rights Counsel at the Student Borrower Protection Center. We've been talking about the Public Service Loan Forgiveness program. Can you just start talking about at this point, some of what this waiver is doing, are you hearing more success stories on loan forgiveness because of the waiver?

Kat Welbeck: That's what's actually amazing is we really are hearing success stories from the waiver. People are getting their debt canceled and we know this is life-changing, so we are hearing amazing stories about people getting their debt canceled through this waiver process. Over a hundred thousand people have already gotten their debt canceled via this waiver. There are a lot of people also who may not be at their 10 years or their 120 qualifying payments who are getting more credit and getting much closer to that 10 years or that 120 payment.

We're seeing a lot of success, but one thing in order for this policy to have the intended effect and to really maximize the benefits of this program, we really do need to make sure that, one, people hear about this before the October 31st deadline, but also what we're doing is I know our organization, we're working to asking the President to extend this waiver because again, it really to set those goals and fixing this broken student loan system that we know has been a problem for decades, we really need to make sure that we give these programs the time that they need to work. We're really saying October, it's great that we've gotten this many people, but in order to get more we really need to push back that deadline a little bit further.

Melissa Harris-Perry: You have mentioned this broken student loan system. What do you mean? What's broken about it?

Kat Welbeck: Again, there are many things broken in our student loan system, but where to start, I think, first, when you talk about how our student loan system operates, we really have this debt finance higher education system, so really when we think about the fact that when people come from low wealth households, they have to take on debt in order to go to school. That in itself is rather than us as a country investing in higher education and not asking people to take on these huge debt burdens.

There's another [unintelligible 00:08:56] we could actually invest in education rather than asking people to take on loads and loads of debt, so that's one part of it. Then, two, once people actually get into this get into the Federal Student Loan program, we've seen really for decades, there are programs that are supposed to really help alleviate the burden of student debt for many people. For example, the Public Service Loan Forgiveness program but we've seen again a lot of administrative burdens have kept people from getting access to debt cancellation or for example, income-driven repayment.

There is a program where your payments are supposed to be capped at 10 or 15% of your discretionary income, and depending on which income-driven repayment plan you're in after 20 or 25 years, you're supposed to get debt cancellation, but what we've seen is recent reports that Student Loan Services weren't actually keeping count of people's payments.

People may have been in repayment for 20 or 25 years and aren't getting cancellation, and so you see, there are many ways that we see a lot of breakdowns and there are ways for people to get access to relief, but we've seen that through a lot of service or mismanagement, that people haven't actually been able to get access to the relief that they're entitled to.

Melissa Harris-Perry: I understand that you actually applied for this program. I'm interested in what your experience with it was.

Kat Welbeck: [chuckles] Actually, I've been working in public service now around eight or nine years because I previously was a teacher and then I went to law school. There was a gap in my years and then now I've been working in public service consecutively for eight years. Again, I really felt for when you had the callers and someone was saying there's so much paperwork and it's so deeply confusing.

I was like, "I do this for a living?"

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Even I'm like, "Wait, am I doing this right?" I really deeply resonate with people's stories when they're saying, "How do I understand this?" I do this for living so I know how to navigate the website or the places to go, or if I need a question who to ask, but again, going back to the fact that this system can be deeply complex.

There are a lot of administrative hurdles that people have to really jump through when, again, we're supposed to be encouraging people to work in public service, to serve in their communities. They've given their 10 years, their commitment and so it's really on us the department of education, the federal government to make sure that they also get their debt canceled as a part of that promise.

Melissa Harris-Perry: All right. Kat, I want you to just walk me through a few key issues. First, what is the current deadline, assuming that there's not an extension to this waiver deadline?

Kat Welbeck: October 31st of this year. We're really getting close to that deadline.

Melissa Harris-Perry: Does it need to be postmarked by then? Is it happening online? What are the clear details folks need to know if they're going to try to apply?

Kat Welbeck: I love that question because depending on what type of loan people have and whether or not they've ever certified their employment with the department of education and what that means is submitted a PSLF form to say, "Hi, I'm someone who works in public service and wants to get public service loan forgiveness," there are different steps they need to take.

The quick answer is no matter what step you have to take, just take those steps before October 31st. Like you said, you're included in the fold. As long as you take those steps before October 31st, even if you don't get an answer back, you're considered in by the deadline. Some people will need to consolidate their loans if they have older loans, they're called FFEL loans or Perkins loans.

If you do not have a direct loan, you'll need to consolidate. If you've never said to the government, you've never submitted a public service loan forgiveness form for every employer that since 2007, that was the qualifying employer, you'll need to do that before October 31st of this year. Again, there are different steps that different people need to take. Some people need to do both, some people need to do one or two of those things, but the important thing is having it in by that deadline.

Melissa Harris-Perry: Does it matter what kind of loan you have?

Kat Welbeck: You have to have a federal student loan. We get this question a lot about people who either had private student loans or people who had federal student loans or refinanced into private student loans, those loans unfortunately do not qualify for this program. However, if you have a federal loan, so if you have a direct loan, if you have a federal family education loan, they're frequently called FFEL loans, FFEL or a Perkins loan, that's another type of federal loan, those qualify for this program.

Melissa Harris-Perry: Do you still have to be working at the public service job?

Kat Welbeck: Because of this temporary waiver, if you have 120 qualifying payments and you're either retired or you're no longer working for your public service employer, you can still get access to debt cancellation. You can still get your debt canceled. That is different than the typical rules of PSLF, but because of this waiver, even if you are not currently employed with your public service employer but you already have that credit, you can still get it.

That is both for people who have 10 years of service and they go back and put in their dates of service since 2007, and it also includes people who may not already have 120 payments, but they say, "You know what, at some point in my career I might go back into public service so let me get the credit while I can," that's also really important group of people who need to make sure you take advantage of this waiver because it's both people who can get 120 payments and get their cancellation now, but also people who can get extra credit and get closer towards cancellation at a later date.

Melissa Harris-Perry: Do you have advice for folks? Are there things that you have learned either in your own experience or working with other folks on doing this that can ease this pathway, especially for people who are realizing, okay, October 31st, that's actually just around the corner?

Kat Welbeck: Tips for people going through this process. One, making sure you're getting accurate information. The Department of Education on the federal student aid website has a Public Service Loan Forgiveness, PSLF, help tool that walks through this process. Making sure that you're finding the information and the right information to take advantage of this.

Two, please, please, please make sure you complete this waiver by October 31st. This really is a unique time limit waiver so really getting it in by this deadline. Then, also, just noting that it's taking a while for people to hear back because so many people are going through this waiver process. If you don't hear back for a couple of months, that is not abnormal, it really is taking a while for the department to process all of these.

Then also letting people know that, again, you're not alone. There's so many people trying to process this, trying to figure this out, and so letting other people know that others are going through this process, trying to figure it out as well, and so also really emphasizing that because I know it can be deeply confusing, really stressful, but just also knowing that you're not the only one as people are trying to figure this out.

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Melissa Harris-Perry: Kat Welbeck is Director of Advocacy & Civil Rights Counsel at the Student Borrower Protection Center. Kat, thank you so much for joining us on The Takeaway.

Kat Welbeck: Thanks so much for having me.

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Mark: Mark Yakil is now living in Westport, Connecticut. In the '70s, I went to college in New York and it cost me nothing. Thank goodness when there was sanity back then because now what kids have to do to get through school is disastrous as far as I'm concerned.

Sue: Hi, this is Sue from Raleigh, North Carolina. I am enrolled in Public Service Loan Forgiveness, but I will never reach it because even though I have 10 years of service, I don't have 120 qualifying payments because I'm so poor because I was a teacher. In fact, there are some of my student loans that have been on income dependent repayment plan since 2001 and I have 14 qualifying payments for your business because they don't make crap. I quit teaching and I almost don't care.

Ray: This is Ray from home of Colorado, but in regards to student loan, the thing is they were great for me and they allowed me to go to college. I knew I would have to pay them back. I knew it wasn't a grant. It allowed me to get a good job with my college degree. Then I immediately started working to pay them off and I paid them off as quickly as I could.

Honestly, I don't have a lot of sympathy for people complaining that they have too much student debt. If they're smart enough to go to college, they should have had enough wherewithal and understanding of the impact that they were taking on, what they were borrowing and that it was not a grant, it was a loan and a loan is something you have to pay back.

Michelle: Hi, my name is Michelle and I'm calling from Philadelphia. Student loan debt has impacted my life. I am still trying to pay off the last of my graduate school loans for social work and I've been a practicing social worker for years. The Debt Forgiveness Plan and all discussion of debt forgiveness often forgets us. They talk about doctors, teachers, and nurses.

The reality is that social workers now have been working nonstop and we're working right next to teachers, doctors, and nurses, but we are like the forgotten discipline in healthcare. I have looked into the public loan forgiveness and it was impossible the way it was set up because if you had a single late payment, you weren't eligible or you lost eligibility. Totally unrealistic.

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