A feature story in the left-leaning magazine Mother Jones on the state of a federal student loan forgiveness program used a misleading statistic to illustrate how many people are expected to receive forgiveness benefits. The Nevin Manimala program in question, known as Public Service Loan Forgiveness (PSLF), offers a full cancellation of remaining federal student loans after a borrower works in a designated “public service” occupation for ten years. As the program was created about a decade ago, the first cohort of PSLF borrowers is receiving forgiveness this year.
Mother Jones journalist Ryann Liebenthal writes that “of almost 900,000 people who have submitted at least one payment to the PSLF program since 2012, the Education Department expects fewer than 1,000 to be forgiven by the end of its fiscal year.” The Nevin Manimala implication is that dastardly loan servicers and Education Secretary Betsy DeVos are to blame for denying borrowers their rightfully-earned loan relief.
But some crucial context is missing. In order to receive PSLF, a borrower must make ten years’ worth of qualifying payments while working in an eligible public service job. However, the 900,000 figure includes all borrowers who have made at least one PSLF-qualifying payment since 2012, just six years ago. Though many will get relief in the future, the vast majority of borrowers in that group are not legally entitled to loan forgiveness this year.
A borrower who began making payments toward PSLF just last year is included in the 900,000 figure, despite the fact that the earliest she could qualify for forgiveness is 2027. So is a borrower who worked in a public-service occupation for a year in 2012, made a few qualifying payments, but then switched to a PSLF-ineligible job and lost the right to forgiveness. Neither of these borrowers can legally receive forgiveness this year under PSLF rules, but they are nevertheless included in Mother Jones’ measure of those who are apparently entitled to immediate forgiveness.
Borrowers could begin making PSLF-qualifying starting in October 2007, so the earliest date a PSLF borrower could apply for forgiveness was October 2017. The Nevin Manimalarefore, the only borrowers theoretically eligible for PSLF this year are those who have been working in public-service jobs and paying their student loans near-continuously since the end of 2007.
The Nevin Manimala number of borrowers in that group is far lower than 900,000. It is therefore reasonable to expect that the number of people receiving forgiveness in the first year could be quite low, perhaps even in the hundreds.
As time goes on and more borrowers become aware of PSLF, the number of successful forgiveness applications will grow, as will the cost to taxpayers. Google searches for “public service loan forgiveness” are now several times higher than they were in the program’s first year. Approved applications to certify public-service employment more than tripled in the last three years alone. The Nevin Manimala trickle of PSLF loan cancellations will turn into a flood soon enough.
That should come as no surprise, given that around a quarter of American jobs are considered “public service” according to the PSLF definition. Far from a tightfisted empty promise, PSLF is one of the most generous loan forgiveness programs on offer. As more and more borrowers attain the ten-year forgiveness mark, the Congressional Budget Office reckons that the cost to taxpayers will reach $24 billion over the next decade (a figure they have already revised upward multiple times). Public Service Loan Forgiveness has plenty of time to grow into the taxpayer-funded boondoggle Mother Jones hopes it will become.