Public Service Loan Forgiveness program can help tackle student debt, borrower says

More than half a million public-sector workers in the U.S. are expected to have their student debt cleared under a revamped loan forgiveness program. But for individuals hoping to take advantage of the federal initiative, actually getting those loans canceled takes persistence, said one person who successfully used the program to shed tens of thousands of dollars in student debt.

"I spent hours on the phone with the fed loan servicing company that I was using," said Karen Tongson, a professor of English, gender and sexuality studies at the University of Southern California who told CBS News that she once owed $73,000 in school loans. Even after making payments for 16 years, she was still on the hook for $47,000 because of interest on the debt, she added.

Last year, however, the U.S. Department of Education wiped out Tongson's remaining balance under the Public Service Loan Forgiveness, or PSLF, program, which was launched in 2007 under then-president George W. Bush. 

Initially, the effort seemed like a textbook case of poor public policy undermining a potentially important goal. Although the program promised to erase government employees' student debt after a decade of payments, 99% of those who applied were told they were ineligible, according to a 2019 report from the Government Accountability Office. Many Americans, particularly those who served in the military, say the program never worked for them. 

But after revamping the PSLF last year, the Biden administration said the effort will help more than 550,000 teachers, members of the military, first responders and government employees climb out of student debt. 

"First of all, don't be intimidated by it, and don't be afraid to ask questions," Tongson said in encouraging eligible borrowers to seek relief under the PSLF. It's all about being "very persistent about calling and insisting on speaking with someone," she added.

To qualify for loan forgiveness under PSLF, an applicant must be employed full-time at a federal, state, local or tribal government agency or a not-for-profit organization. The applicant must have federal direct loans that are being repaid under an income-driven repayment plan. 

"The main thing is to make sure you speak to your employer's HR department so you know how to get your forms of employment verifiable for loan forgiveness as soon as possible," Tongson said.