Background Education administers federal student aid programs, including the Direct  Loan program, through the Office of Federal Student Aid. Under the  Direct Loan program, Education issues and oversees the loans while  contractors service them. Education currently contracts with nine loan  servicers that each handle the billing and other services for a portion of  the over $1 trillion in outstanding student loans provided through the  Direct Loan program. These servicers track and manage day-to-day  servicing activities, and they report key information on the status of each  loan to Education’s central student loan database. In 2011, Education  contracted with one of its existing loan servicers to become the single  servicer for borrowers pursuing PSLF. The PSLF servicer is responsible  for processing certification requests and forgiveness applications, as well  as servicing the loans of borrowers who have met basic PSLF eligibility  requirements. The PSLF program provides eligible borrowers with forgiveness on the  remaining balance of their Direct Loans after they have met program  requirements. To receive forgiveness for a loan, borrowers are required  to be employed by a qualifying employer when making 120 qualifying  payments, at the time they apply for forgiveness, and at the time they  receive forgiveness for their loans. Specifically, borrowers are required  to: Work full-time for a public service organization, such as a government organization, agency, or entity at any level (federal,  state, local, or tribal); a nonprofit, tax exempt organization (under section 501(c)(3) of  the Internal Revenue Code); or another private nonprofit organization that provides certain public  services. Not be in default and be repaying their loans through an income- driven repayment plan (in which borrowers’ monthly payments are  based on their income and family size); the 10-year Standard  repayment plan; or another plan if the monthly payment amounts  equal or exceed the amount the borrower would have paid under the  10-year Standard repayment plan. Although the 10-year Standard  repayment plan qualifies for PSLF, borrowers in this plan will pay off  their loans before they are eligible for forgiveness unless they change  to an income-driven repayment plan that leaves them with a balance  remaining to be forgiven after 120 payments. Make 120 on-time monthly loan payments for the full amount due on  their bill after October 1, 2007. These monthly payments do not need  to be consecutive. In January 2012, Education began offering a voluntary process to certify  borrowers’ public service employment and loans as eligible for PSLF.  Borrowers can request to have their employment and loans certified at  any time to make sure they are meeting basic program requirements and  are on track towards qualifying for loan forgiveness (see fig. 1). Once a  borrower submits a request, the PSLF servicer reviews the borrower’s  employment and loans to determine if they qualify, and if so, counts how  many qualifying payments the borrower has made. In September 2017, 10 years after the PSLF program was established,  Education began accepting loan forgiveness applications from borrowers.  The application is similar to the form borrowers use to request certification  of their employment and loans for PSLF, but is intended for borrowers  that have already made 120 qualifying payments (see fig. 2). The PSLF  servicer reviews a borrower’s application and incorporates information  from any previously approved certification forms to determine if the  borrower’s employment and loans qualify and if they have made 120  qualifying payments. If the borrower meets all of these requirements, the  PSLF servicer forwards the application to Education for final review. If  Education determines the borrower has met all eligibility requirements, it  directs the PSLF servicer to forgive the remaining balance on the  borrower’s loans. Many Borrowers Are  Pursuing Public  Service Loan  Forgiveness, and  Recent Legislation  Requires Education  to Conduct Additional  Outreach to  Borrowers Over 890,000 Borrowers  Took an Initial Step  Towards Qualifying for  PSLF by Having Their  Employment and Loans  Certified, and 55 Have  Received Loan  Forgiveness Over 890,000 borrowers have taken an initial step towards qualifying for  the PSLF program by voluntarily having their employment and loans  certified as eligible for PSLF, according to data from the PSLF servicer as  of April 2018. Of these, over 520,000 borrowers had recorded at least  one qualifying payment that counted towards the 120 required to be  eligible for loan forgiveness (see fig. 3). In total, almost 1.2 million  borrowers requested to have their employment and loans certified but  over 280,000 were denied, primarily due to missing information on the  form, or because they did not have qualifying federal loans or work for a  qualifying employer, according to data from the PSLF servicer. The number of new borrowers whose employment and loans have been  certified as eligible for PSLF has increased in each of the past 6 years,  according to PSLF servicer data (see fig. 4). Officials with the PSLF  servicer said they anticipated that the volume would continue to increase  as the program gains visibility. In the first 8 months that borrowers were able to apply for loan  forgiveness (September 2017 through April 2018), Education had  approved 55 borrowers and forgiven a total of almost $3.2 million in  outstanding student loan balances, an average of almost $58,000 per  borrower. The amount of loan forgiveness for individual borrowers ranged  from almost $800 to almost $290,000. Over 19,300 borrowers had  submitted loan forgiveness applications as of April 2018 (see fig. 5). Of  the almost 17,000 borrowers with applications that had been processed,  over 40 percent had qualifying loans and employment but were denied  because they had not yet made 120 qualifying payments. The other most  common reasons borrowers were denied included missing information on  the application or because the borrower did not have qualifying federal  loans. Education officials estimated that about 700 borrowers will be  approved for loan forgiveness by September 30, 2018. Borrower Confusion about  PSLF Requirements  Persists, and Recent  Legislation Requires  Education to Conduct  Additional Outreach Although Education has conducted some outreach to communicate PSLF  program requirements to borrowers, the large number of borrowers  whose certification requests and forgiveness applications were denied  suggests that many borrowers do not understand or are not aware of  these requirements. For example, over half of borrowers that requested to  have their employment and loans certified as of April 2018 either did not  meet basic eligibility requirements or had yet to make any qualifying loan  payments. This includes over 150,000 borrowers who requested to have  their employment and loans certified despite not having qualifying federal  loans, which suggests these borrowers either did not know which types of  loans they had or which types qualified for the program. Borrowers who  had qualifying loans also may have been confused about requirements  related to making qualifying payments. Over 370,000 borrowers that had  their employment and loans certified as of April 2018 had not made any  qualifying payments at the time of certification because they were not on  qualifying repayment plans, had loans in a deferment or forbearance,  were still in the grace period before starting repayment, or had recently  consolidated their loans, among other reasons, according to PSLF  servicer data (see fig. 6). Although some of these borrowers may have  understood how prior choices they made regarding repayment of their  loans would affect their ability to make qualifying payments, other  borrowers may not have. Officials with the PSLF servicer said borrowers were frequently confused  by program requirements related to qualifying loans, employment,  repayment plans, and payments. For example, PSLF servicer officials  said that borrowers were sometimes unaware that they were not on a  qualifying repayment plan or that forbearance, deferment, and loan  consolidation would affect their qualifying payments. PSLF servicer  frontline customer service staff also said they frequently received calls  from borrowers who were confused about whether their loans qualified for  PSLF and other program requirements. Two other loan servicers we  spoke to identified the same general areas of confusion among borrowers  who call with questions about PSLF. In addition, borrower complaints  reported by the Consumer Financial Protection Bureau indicate confusion  with PSLF requirements related to qualifying loans and payments. Education uses several methods to conduct outreach to inform borrowers  about PSLF requirements, but denial data suggest and PSLF servicer  officials confirmed that borrower confusion persists. Education currently  provides information on its website about PSLF requirements and links to  an online portal where borrowers can check what types of loans they  have and identify their loan servicer. When the PSLF servicer notifies  borrowers that their certification requests or forgiveness applications were  denied, the notification letter includes information on program  requirements and explains why the borrower did not qualify for the  program. Education has also adopted other methods to raise awareness  of the program among borrowers, such as webinars and outreach to  schools, in response to a recommendation in our previous report.  Education also instructs borrowers who have additional questions about  PSLF to contact the PSLF servicer. However, officials with the PSLF  servicer said they can provide more details about the program but cannot  answer certain eligibility questions, such as whether a particular borrower  has qualifying employment or is on a qualifying repayment plan, until the  borrower submits a form to request certification. Officials with three  other loan servicers we spoke with also said it is their general policy not  to answer specific questions about an individual borrower’s eligibility for  PSLF due to the complexity of program requirements, and they instead  direct the borrower to contact the PSLF servicer. Although this approach  may help avoid the risk of other servicers providing borrowers with  incorrect advice, it highlights the need for Education to provide borrowers  with clear and sufficient information about how to qualify for the program.  It is essential for borrowers to understand eligibility requirements because  the retrospective nature of the program requires borrowers to make  decisions about their loans and employment months or years before they  submit a PSLF certification request or apply for loan forgiveness. For  example, the Consumer Financial Protection Bureau reported that  borrowers have complained of spending years making payments,  believing they were making progress towards PSLF loan forgiveness, and  then learning that they were not eligible. Recent legislation requires Education to conduct additional outreach. The  consolidated appropriations act enacted in March 2018 appropriated $350  million to forgive the loans of borrowers who otherwise would qualify for  PSLF had they not selected a non-qualifying repayment plan. In addition  to these funds, the act directed that $2.3 million of Education’s  appropriation for administering student aid be used to conduct outreach to  borrowers about PSLF, to help ensure borrowers are meeting program  requirements. The act specifically requires Education to communicate  PSLF program requirements to all Direct Loan borrowers and improve  PSLF outreach and information through calls, electronic communications,  and other methods. Once implemented, these provisions could reduce  confusion about PSLF requirements and help Education provide better  service to borrowers. Education Could  Provide More  Comprehensive  Information to  Improve Program  Administration and  Qualifying  Employment and  Loan Payment  Determinations Education’s Piecemeal  Guidance and Instructions  to the PSLF Loan Servicer  Create Challenges for  Program Administration Education does not have a comprehensive document or manual to  provide the PSLF servicer guidance and instructions, which PSLF  servicer officials said makes it difficult to effectively administer the  program and provide consistent service to borrowers. Instead,  Education’s guidance and instructions to the PSLF servicer are dispersed  in a piecemeal manner across multiple documents, including Education’s  original contract with the servicer, multiple updates to the contract, and  hundreds of emails. According to PSLF servicer officials, administering  the program based on this fragmented collection of guidance and  instructions creates a risk that relevant information may be overlooked. Education’s use of email to communicate key guidance and instructions  to the PSLF servicer is particularly problematic because this important  information is not disseminated to relevant individuals at Education and  the PSLF servicer in the same standard fashion as official changes to the  servicing contract. Various individuals at Education have sent emails with  guidance and instructions to different staff at the PSLF servicer. As a  result, all the relevant parties may not be aware of important policy  changes or clarifications provided in these emails, according to PSLF  servicer officials and Education’s monitoring reports. In one instance, for  example, Education staff incorrectly identified what they thought was an  error in how the servicer was certifying borrowers that were employed  part-time because they were not aware of the most recent guidance that  other staff at Education had emailed the servicer on the topic. Similarly,  PSLF servicer officials said their staff are sometimes unaware of relevant  guidance and instructions in emails provided by Education, which creates  a risk that some policy updates will be overlooked and not consistently  implemented. Education has also used email to communicate certain  policy clarifications involving employer eligibility and payment counting  that, according to the PSLF servicer, have affected hundreds of  borrowers and set precedents for future eligibility decisions. Gaps in Education’s guidance and instructions have also left the PSLF  servicer uncertain about how to administer key aspects of the program.  For example, PSLF servicer officials said that from 2016 to 2018 they  were awaiting additional clarifications from Education about how to  account for loan payments when borrowers pay more than the amount  due or submit a payment several weeks before the due date. How  overpayments and prepayments are accounted for can affect whether the  borrower’s subsequent payments qualify for PSLF because borrowers  can only receive credit for one payment per month and only when a  payment is due. While Education provided a clarification about how to  address this issue in May 2018, current guidance from Education on other  topics is still unclear or incomplete, according to PSLF servicer officials. The absence of a central, authoritative source of PSLF guidance and  instructions creates a risk of differing interpretations and inconsistent  implementation. The PSLF servicer has developed its own internal  processing handbook based on Education’s guidance and instructions,  which PSLF servicer officials said is useful for helping staff process  certifications and forgiveness applications. However, Education has  reviewed sections of this processing handbook and identified places  where the handbook does not accurately reflect PSLF requirements and  could result in borrowers’ certification requests being improperly approved  or denied. The PSLF servicer has made updates to its processing  handbook to address certain issues that Education identified, but  Education has not conducted a comprehensive review of this handbook.  As a result, there is a risk that the PSLF servicer may still be applying  Education’s guidance and instructions differently from how the agency  intended. PSLF servicer officials said it would be helpful if Education  created a centralized manual of PSLF guidance and instructions. The lack  of a central guidance document also makes it difficult to maintain program  continuity in the event of staff turnover or if Education decides to contract  with a new servicer to administer the PSLF program. Federal internal  control standards state that agencies should communicate information to  those who need it, in a form that enables them to carry out their  responsibilities. Education has recently taken some steps to provide  clearer guidance and instructions, such as holding meetings with PSLF  servicer officials every 2 weeks to discuss any administrative issues.  Education officials also told us they plan to develop a comprehensive  PSLF servicing manual, but they do not have a timeline for completing it.  They are currently drafting an initial section of the manual focusing on  payment counting. The current lack of a definitive and comprehensive  source of guidance and instructions for the PSLF servicer creates the risk  of inconsistent interpretations that could potentially result in borrowers  being improperly denied loan forgiveness since Education does not  currently review loan forgiveness applications that are denied by the  PSLF servicer. Additional Information  from Education Could  Improve the PSLF  Servicer’s and Borrowers’  Ability to Determine  Whether Borrowers’  Employment Qualifies for  Loan Forgiveness Education has provided the PSLF servicer and borrowers with limited  information that could help them determine which employers qualify for  PSLF, creating uncertainty for borrowers and increasing the risk that the  PSLF servicer may improperly certify or deny certification to some  borrowers. Education has not provided the PSLF servicer with a definitive  source of information for determining which employers qualify a borrower  for loan forgiveness. Instead, Education has identified some data sources  the PSLF servicer can use to determine whether borrowers are working  for qualifying employers. However, these sources are not comprehensive,  and PSLF servicer officials said they sometimes have to consult other  sources that have significant limitations. For example, Education directs  the PSLF servicer to review the Internal Revenue Service’s public list of  501(c)(3) organizations to identify qualifying nonprofit employers. Since  this list does not capture all potentially qualifying nonprofits, the PSLF  servicer supplements this with other sources that have not been fully  reviewed or assessed for accuracy by Education. For example, PSLF  servicer officials told us they use an online directory of nursing home  facilities to help determine if certain nursing homes are nonprofit  employers. However, this website explicitly states that it does not  guarantee that the information it provides is accurate or current. PSLF  servicer officials also said they sometimes use state government websites  to research organizations’ nonprofit status, but they only have access to  the relevant information from states that provide it for free. For assessing  government employers, Education directs the servicer to www.usa.gov,  an official federal government website that describes government  agencies and services, but this source provides limited information on  state and local government employers. In addition, PSLF servicer officials  said it is particularly difficult to assess certain types of employers, such as  quasi-governmental entities and charter schools. PSLF servicer officials  said that when they are uncertain whether an employer qualifies, they  elevate the assessment to Education, but they generally try to resolve as  many employer determinations as possible by using supplemental  sources to research employers. However, the reliability of some of these  supplemental sources is unclear. PSLF servicer officials said that having additional information would help  them assess employers more quickly and minimize the risk of inaccurate  decisions. One way to provide this information would be for Education to  develop an official, comprehensive list of qualifying employers, which  would help the PSLF servicer assess employers and help borrowers  determine whether they are eligible for PSLF, according to PSLF servicer  officials. Education officials said they are considering creating their own  list of qualifying employers and are investigating how to leverage  information from other federal government agencies that could be useful  for categorizing employers. In particular, Education officials said they  have reached out to the Internal Revenue Service to explore the  feasibility of obtaining relevant data on employers. Education could also  expand and improve on a database that the PSLF servicer created based  on its prior assessments of employers. Education staff that conducted a  spot check on the PSLF servicer’s database expressed concerns about  using it as a sole source for assessing employers, according to an  Education monitoring report, but Education officials said it could provide a  foundation for Education to build on. Borrowers would also benefit from additional information about qualifying  employers, according to PSLF servicer officials. Education currently  provides borrowers with basic information on the types of employers that  qualify for PSLF, but not sufficient details to reliably determine whether  specific employers qualify. When borrowers contact their loan servicer  with questions about their employer’s eligibility, officials with the PSLF  servicer and other loan servicers we spoke with said they generally do not  provide borrowers with information about whether a specific employer  qualifies, due to the complexities involved in assessing qualifying  employers. Instead, borrowers are encouraged to submit an employment  certification form once they are working for an employer in order to find  out if the employer qualifies. PSLF servicer officials said that providing  borrowers with access to additional information about qualifying  employers, such as an official list, would reduce uncertainty for borrowers  and reduce the number of borrowers who submit certification requests  and forgiveness applications despite working for non-qualifying  employers. In addition, making this information readily available to  borrowers could help them to make better informed employment  decisions rather than having to wait to submit a certification request after  they have started a job to find out if their employer qualifies. Federal internal control standards state that agencies should  communicate the necessary quality information to those who need it in  order to achieve the agencies’ objectives. Unless Education provides  additional information to help the PSLF servicer make employer  assessments, it will remain difficult to determine whether employers  qualify for the program, raising the risk that borrowers’ certification  requests will be improperly approved or denied. Moreover, without access  to sufficient information about qualifying employers, borrowers will not be  able to reliably determine whether certain employers qualify for PSLF.  This creates uncertainty for borrowers as to which jobs and careers to  pursue and leaves them to make important employment decisions without  knowing until after the fact how these decisions affect their future  eligibility for PSLF. Education Could Improve  the Information Provided  to the PSLF Servicer and  Borrowers about Whether  Borrowers’ Payments  Qualify for Loan  Forgiveness Collecting Consistent Payment  Information Education does not ensure the PSLF servicer receives consistent  information on borrowers’ prior loan payments from other loan servicers,  which could raise the risk of qualifying payments being miscounted. In  order to process certification requests and loan forgiveness applications,  the PSLF servicer has to examine the borrower’s prior loan payment  information to determine which prior payments count towards the 120  needed to qualify for loan forgiveness. This is relatively easy in cases  where the PSLF servicer was servicing the borrower’s loans during the  entire period he or she was pursuing PSLF because the servicer already  has the necessary information on their prior payments, according to PSLF  servicer officials. However, the PSLF servicer does not have the same  information readily available for loans that are serviced by one of  Education’s eight other loan servicers. For these loans, Education  established a process for servicers to use in transferring loan and prior  payment information to the PSLF servicer. The servicers transfer most  information through standardized templates that Education developed.  However, despite the use of standardized templates, the PSLF servicer  does not receive consistent and reliable information from other servicers,  according to PSLF servicer officials. For example, PSLF servicer officials  said the lack of standard definitions and terminology among loan  servicers leads servicers to interpret some data fields differently, resulting  in inconsistencies in the data other loan servicers report to the PSLF  servicer. Comparable data and standardized terminology is particularly  important given the need for loan servicers with different systems and  practices to communicate key payment information with one another.  PSLF servicer officials said inconsistencies in the information provided by  other loan servicers make it challenging to determine whether borrowers  are on qualifying repayment plans or making qualifying payments. For  example, when a borrower has multiple loans, PSLF servicer officials said  they assess PSLF eligibility and payments separately for each individual  loan. Officials added that some servicers only report total monthly  payments for the borrower’s combined loans, and not how these  payments were allocated among each loan. This makes it difficult for the  PSLF servicer to determine whether the borrower paid the full monthly  payment amount due on each loan, which it needs to know in order to  determine whether the payment qualifies for PSLF. Officials with Education and the PSLF servicer said that inconsistencies in  the information obtained from other loan servicers increase the risk of  miscounting qualifying payments. Education officials said they have  started to track these data consistency problems and coordinate  discussions among the PSLF servicer and the three other loan servicers  that together provide the data systems used by all nine servicers.  However, these efforts are in the early stages. Federal internal control  standards state that agencies should use quality information to achieve  their objectives. Standardizing the prior payment information transferred  among servicers could improve the PSLF servicer’s ability to determine  qualifying payment counts for borrowers transferring from other servicers. Communicating Information to  Borrowers Although Education and PSLF servicer officials acknowledge the risk of  miscounting qualifying payments, the PSLF servicer does not provide  borrowers with sufficient information to easily catch errors. In addition to  the risks caused by inconsistent prior payment information from other  loan servicers, the payment counting process is also vulnerable to errors  in instances when the PSLF servicer has to manually review payment  information from other servicers, according to PSLF servicer officials and  an Education monitoring report. Borrowers whose loans were  transferred to the PSLF servicer from other loan servicers have  complained about inaccurate qualifying payment counts, according to a  Consumer Financial Protection Bureau report. Officials with the PSLF  servicer said they rely on borrowers to catch any payment counting errors  resulting from issues with information provided by other loan servicers.  However, the PSLF servicer provides borrowers with aggregate counts of  qualifying payments, which are useful for helping borrowers track their  progress, but do not provide borrowers with enough detail to check the  servicer’s counts and identify prior payments that the servicer may have  missed (see fig. 7). Borrowers have several options for disputing payment  counts or other aspects of the eligibility determination process, including  contacting the PSLF servicer or filing an official complaint with  Education’s Federal Student Aid Ombudsman Group or through the  Federal Student Aid Feedback System. However, the lack of detailed  information on qualifying payment counts makes it difficult for borrowers  to determine whether the count is correct or not. Education officials said they have not considered requiring the PSLF  servicer to provide more detailed information to borrowers on which prior  payments were approved or denied. Officials noted that there would be a  cost associated with providing this information to borrowers, although  they have not produced a cost estimate. Also, officials said that providing  too much information may confuse borrowers, and they must consider  how to meet borrowers’ need for detailed information without  overwhelming borrowers with payment counting complexities. Officials  with the PSLF servicer said providing this information to borrowers could  be helpful but would require time to confirm the information was correct  and would only be done at the direction of Education. Federal internal  control standards state that agencies should communicate necessary  quality information to external parties. While providing too much  information could prove counterproductive, borrowers could benefit from  receiving greater detail about their qualifying payments beyond the  aggregate counts of qualifying payments that they currently receive.  Without clearer and more detailed information on qualifying payments,  borrowers may not detect any errors in payment counts, which could  ultimately affect borrowers’ eligibility for loan forgiveness. Conclusions Education is responsible for establishing the administrative structure  necessary to fulfill the PSLF program’s goal of encouraging individuals to  enter and continue in public service employment by providing loan  forgiveness to eligible borrowers who meet program requirements.  However, Education has not provided the PSLF servicer with a  comprehensive source of guidance and instructions on how to operate  the program, raising the risk that the PSLF servicer may improperly  approve or deny borrowers’ certification requests and forgiveness  applications. Education officials told us they have plans for creating a  comprehensive PSLF servicing manual, but no timeline for doing so. Working for a qualifying employer is one of the key requirements of the  PSLF program; however, Education has not provided the PSLF servicer  and borrowers with sufficient information for determining whether  employers qualify. This makes the PSLF servicer’s employer  assessments vulnerable to inconsistencies and fosters uncertainty for  borrowers as to whether or not their employment will eventually qualify  them for loan forgiveness. Similarly, inconsistencies in the information used for counting borrowers’  qualifying loan payments raise the risk of errors. Borrowers should be  confident that their loan payments will be accurately counted regardless  of who their servicer is. However, Education has not ensured the PSLF  servicer is receiving consistent loan payment history information from  other loan servicers, increasing the risk of inaccurate qualifying payment  counts. The chance that these and any other payment counting errors will  go undetected is compounded by the fact that Education does not require  the PSLF servicer to provide borrowers with details on which payments  qualified and which did not. This makes it difficult for borrowers to detect  erroneous counts that could ultimately affect their eligibility for loan  forgiveness. Consequently, some borrowers may be required to make  more payments than necessary before receiving loan forgiveness, while  others may be improperly approved for forgiveness. Recommendations for  Executive Action We are making the following four recommendations to Education’s Office  of Federal Student Aid:  The Chief Operating Officer of the Office of Federal Student Aid should  develop a timeline for issuing a comprehensive guidance and instructions  document for PSLF servicing. This could involve developing a new  servicing manual or expanding upon the PSLF servicer’s existing  processing handbook. (Recommendation 1) The Chief Operating Officer of the Office of Federal Student Aid should  provide additional information to the PSLF servicer and borrowers to  enhance their ability to determine which employers qualify for PSLF. This  could involve Education developing an authoritative list of qualifying  employers or improving the PSLF servicer’s existing database, and  making this information available to borrowers. (Recommendation 2) The Chief Operating Officer of the Office of Federal Student Aid should  standardize the information the PSLF servicer receives from other loan  servicers to ensure the PSLF servicer obtains more consistent and  accurate payment information for borrowers pursuing PSLF.  (Recommendation 3) The Chief Operating Officer of the Office of Federal Student Aid should  ensure that borrowers receive sufficiently detailed information from the  PSLF servicer to be able to identify any errors in the servicer’s counts of  qualifying payments, including information on whether or not each  payment qualified toward forgiveness. (Recommendation 4) Agency Comments  and Our Evaluation We provided a draft of this report to Education for its review and  comment. In its comments, reproduced in appendix I, Education  concurred with each of our recommendations and identified steps it plans  to take to implement them. To improve guidance and instructions for  PSLF servicing, Education stated it is documenting PSLF requirements  and guidelines and plans to incorporate them into a comprehensive  guide. Regarding our recommendation to provide additional information  on qualifying employers to the PSLF servicer and borrowers, Education  stated that it is reviewing options for developing an online help tool that  would be expanded to incorporate qualifying employer information. To  standardize the information other loan servicers provide to the PSLF  servicer, Education stated it will continue its efforts to address data  definition issues related to the data exchanged between servicers. To  ensure borrowers receive sufficiently detailed information on counts of  qualifying payments, Education stated it will review the letters the PSLF  servicer sends to borrowers to determine how to better communicate  regarding qualifying payment counts, program requirements, and  employer eligibility. We also provided relevant report sections to the PSLF  servicer and the three other loan servicers included in our review for  technical comments. The PSLF servicer provided technical comments,  which we incorporated as appropriate. As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretary of Education, and other  interested parties. In addition, the report will be available at no charge on  the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact  me at (617) 788-0534 or emreyarrasm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix II. Appendix I: Comments from the U.S.  Department of Education Appendix II: GAO Contact and Staff  Acknowledgments GAO Contact Staff  Acknowledgments In addition to the contact named above, Debra Prescott (Assistant  Director), William Colvin (Analyst-in-Charge), and Linda Collins made key  contributions to this report. Additional assistance was provided by James  Bennett, Deborah Bland, Alicia Cackley, Sarah Cornetto, Hedieh Fusfield,  Kirsten Lauber, Sheila R. McCoy, Jeffrey G. Miller, Jessica Orr, Ellen  Phelps Ranen, and Paul Wright.
Starting in September 2017, the first borrowers became eligible and began applying to have their loans forgiven through the PSLF program. GAO was asked to review the PSLF program. This report examines the (1) number of borrowers pursuing PSLF and the extent to which Education has conducted outreach to increase borrower awareness of program eligibility requirements, and (2) extent to which Education has provided key information to the PSLF servicer and borrowers. GAO analyzed data from the PSLF servicer on employment and loan certifications and loan forgiveness applications as of April 2018; reviewed Education's guidance and instructions for the PSLF servicer; assessed the information used by Education and the PSLF servicer and communicated to borrowers against federal internal control standards; and interviewed officials from Education and the four largest loan servicers, including the PSLF servicer. As of April 2018, over a million borrowers had taken steps to pursue Public Loan Service Forgiveness (PSLF) from the Department of Education (Education), but few borrowers have been granted loan forgiveness to date. The PSLF program, established by statute in 2007, forgives borrowers' federal student loans after they make at least 10 years of qualifying payments while working for certain public service employers and meeting other requirements. Over 890,000 borrowers have passed a first step towards potentially qualifying for PSLF by voluntarily having their employment and loans certified as eligible for PSLF as of April 2018, according to data from Education's PSLF loan servicer. While borrowers first became eligible to apply for loan forgiveness in September 2017, few applicants had met all requirements as of April 2018, with 55 borrowers having received loan forgiveness (see figure). Education has used various outreach methods to inform borrowers about PSLF, but the large number of denied borrowers suggests that many are still confused by the program requirements. A recently enacted law requires Education to conduct additional outreach to help borrowers understand how to meet program requirements. Education does not provide key information to the PSLF servicer and borrowers. Guidance and instructions: Education provides piecemeal guidance and instructions to the PSLF servicer it contracts with to process certification requests and loan forgiveness applications. This information is fragmented across the servicing contract, contract updates, and hundreds of emails. As a result, PSLF servicer officials said their staff are sometimes unaware of important policy clarifications. Education officials said they plan to create a comprehensive PSLF servicing manual but have no timeline for doing so. Qualifying employers: Education has not provided the PSLF servicer and borrowers with a definitive source of information for determining which employers qualify a borrower for loan forgiveness, making it difficult for the servicer to determine whether certain employers qualify and for borrowers to make informed employment decisions. Qualifying loan payments: Education does not ensure the PSLF servicer receives consistent information on borrowers' prior loan payments from the eight other federal loan servicers, which could increase the risk of miscounting qualifying payments. Borrowers also lack sufficiently detailed information to easily identify potential payment counting errors that could affect their eligibility for loan forgiveness. These weaknesses are contrary to federal internal control standards for using and communicating quality information, creating uncertainty for borrowers and raising the risk some may be improperly granted or denied loan forgiveness.