Biden promised to reform a student loan forgiveness program that's still rejecting 98% of applicants

• Biden campaigned on fixing the Public Service Loan Forgiveness (PSLF) program.
• But new Education Dept. data shows the program is still rejecting 98% of borrowers.
• Experts and lawmakers want Biden to fix the "extraordinary confusion" the program has caused.

President Joe Biden campaigned on reforming the Public Service Loan Forgiveness (PSLF) program, which has been under fire for years for rejecting the vast majority of applicants.

New Education Department data found that 98% of borrowers are still being rejected from the program.

PSLF allows government and nonprofit employees with federally backed student loans to apply for loan forgiveness after proof of 120 monthly payments under a qualifying repayment plan, but it has an extremely high denial rate. Biden campaigned on fixing it. His campaign website said "Biden will see to it that the existing Public Service Loan Forgiveness Program is fixed, simplified, and actually helps teachers."

But newly released Education Department data found that 97.9% of borrowers had been rejected from the program as of April of this year for failing to meet the program's requirements. In 2018, 99% of applicants were rejected. The reasoning the department gave for the high denial rate comes down to borrowers not meeting the 120 qualifying payments, but experts say the program itself is to blame - not borrowers.

"Washington has had almost 14 years to get PSLF right," Seth Frotman, executive director of the Student Borrower Protection Center, which advocates an end to the student-debt crisis, wrote on Twitter on Monday. "Enough excuses. Enough deflecting. Enough of industry cashing in while borrowers struggle and @usedgov sits at the sidelines. It's time to restore the promise of PSLF," he added.

Last month, 56 Democrats sent a letter urging Education Secretary Miguel Cardona to fix the loan forgiveness program to get rid of the "extraordinary confusion" the program has caused borrowers, prompting the high rejection rate.

"After the first round of forgiveness initially became available to PSLF borrowers more than three years ago, approval rates for the program have remained below 2.5%," the letter said. "The program has been beset by numerous 'donut holes' that disqualify certain types of loans, repayment plans and the payments themselves, leading to extraordinary confusion and distrust of the PSLF program and, by extension, the federal government."

A Government Accountability Office report also found that 287 Dept. of Defense personnel had received loan forgiveness as of January 2020, while 5,180, or 94% of DOD borrowers, were denied. Sen. Elizabeth Warren released a statement calling the findings, and PSLF, "nothing short of a disaster."

Education Secretary Betsy DeVos was even sued multiple times over the program's high denial rate.

Biden's Education Department has announced plans to begin working on improving the program. Insider reported last week that Biden's regulatory agenda includes reviewing PSLF and "plans to look at these regulations for improvements."

That followed the Education Department's announcement that it was beginning the process of issuing new higher-education regulations, but no further detail was provided on what the mentioned improvements would look like.

Frotman called on the Education Department to cancel student debt for eligible borrowers who have been rejected form PSLF, writing on Twitter that "it's time for @usedgov to cancel the debt of public service workers who have paid for 10+ years."