Why Are So Many People Eligible for Public Service Loan Forgiveness?

On Tuesday, a federal court dismissed a lawsuit against the Pennsylvania Higher Education Assistance Agency, made by a man who says he was given incorrect information that led him to not receive student debt cancelation under the Public Service Loan Forgiveness (PSLF) program.

While the lawsuit focuses on one person’s grievance, the case highlights just how absurdly broad eligibility for the PSLF program has become. Intuition would imply that the program would only apply to a small number of truly public-service, poorly paid jobs, but as many as 25 percent of Americans actually qualify for the program, including many working for private employers.

According to the six-page opinion from the 4th Circuit Court of Appeals, Todd Berman took out two loans from the Department of Education. In order to qualify for PSLF, he had to work at a qualifying employer for 10 years. For four years, Berman served in the United States Army, a qualifying employer, but trouble arose when Berman changed jobs. He claims that he was repeatedly told that his new employer, Blue Cross Blue Shield of North Carolina—a private not-for-profit health insurance company—qualified for the program. However, in 2018, he was sent a letter informing him that his employer no longer qualified.


Read full story from reason.com.

Stopping Socialism is a project of The Heartland Institute and The Henry Dearborn Center for Human Rights, a nonprofit association of professionals and scholars.