More than 178,000 troops may be eligible for this student loan debt forgiveness

Although many military members and Defense Department civilian employees could benefit financially from a 14-year-old federal student loan debt forgiveness program, the benefit is underused and misunderstood, according to a new report from government auditor.

Few have applied so far for the Public Service Loan Forgiveness program, and of those who have, about 94 percent have been denied, according to the report from Government Accountability Office, showing a need for more information about eligibility requirements.

GAO found that many borrowers were confused by the PSLF program requirements. Defense and Education department officials need to work together, and push to get the word out about the program, its benefits, and its eligibility requirements, auditors stated, in order to increase the number who use the benefit successfully.

Its fundamental purpose is a recruiting and retention tool. The PSLF was established in 2007 by Congress to encourage individuals to pursue careers in public service, to include military or civilian careers with DoD. Those with qualifying federal student loans may be eligible for the remaining balance of their loans to be forgiven, if they remain in public service employment for 10 years while making 120 qualifying loan payments, among other requirements. PSLF is administered by the Department of Education.

Since September, 2017, when the first borrowers became eligible to meet the 10-year public service requirement, more than 5,000 military and DoD civilians have applied. But there are currently more than 178,000 military members with federal loans who may qualify for the program, according to GAO.

Defense officials don’t widely use the PSLF program for recruitment and retention, despite facing challenges in certain career fields, according to the GAO report. One reason cited is that some DoD officials prefer to use other DoD benefits and incentives that DoD directly controls, for recruitment and retention. Examples are bonuses and DoD’s own student loan repayment program.

Auditors noted that according to the Office of Personnel Management, “DoD is the largest federal provider of student loan repayments, distributing more than $22 million in student loan repayments for 2,775 personnel in calendar year 2018.”

That student loan repayment program is separate from Department of Educations’ Public Service Loan Forgiveness program. Between 2017 and January, 2020, 124 military and 163 DoD civilian personnel were approved for loan forgiveness under the PSLF program, according to GAO.

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