Documenting and Maintaining Eligibility
Comment: Many commenters asked the Department to develop a clear
and simple method for the borrower, the employer, or both, to determine
annually the borrower's eligibility for public service loan forgiveness
(i.e., that the borrower's employment was with an eligible employer and
that the borrower was paying under an acceptable repayment plan). The
commenters stated that they believed strongly that borrowers should not
be left in the dark regarding whether they would qualify for loan
forgiveness by applying and documenting their eligibility after 10
years of service and repayment. The commenters noted that this approach
would require the borrower to retain pay stubs or other supporting
documentation of their employment for the entire 10-year period. The
commenters believed that this recordkeeping obligation would be too
great of a burden to impose on recent graduates. The commenters also
believed that ongoing information on the borrower's eligibility is
important for the borrower's career and financial decisions. The
commenters recommended that the Department create an on-line, password-
protected system through which qualifying employers could annually
certify the employment of borrower-employees, or otherwise provide a
reliable system for borrowers to document, confirm, and track job
eligibility. Some of these commenters also asked that we establish a
program of employer pre-certification under which the Department would
maintain an ongoing list of certified eligible employers for borrower
reference. One commenter disagreed with the Department's position in
the NPRM that implementing such a system was an operational rather than
a regulatory issue, and asked that a system for annual eligibility
verification be reflected in the regulations. Another commenter stated
that it was preferable to require a borrower to submit past pay stubs,
direct deposit salary documents, or wage and salary statements (W-2s)
rather than require the employer to provide some certifying document of
the borrower's dates of employment.
Many commenters urged the Department to incorporate the public
service loan forgiveness program as a term and condition in the
Department's Direct Loan master promissory note (MPN). The commenters
believed that making this change to the MPN would prevent Congress from
repealing the forgiveness benefit after borrowers have spent years
working to meet the eligibility requirements.
Another commenter recommended that the Direct Consolidation Loan
application and the public service loan forgiveness application be
combined so that no gap exists in the student's ability to consolidate
and then pursue public service loan forgiveness.
Other commenters representing participants in the FFEL industry
requested that the Department's procedures for eligibility
determinations and notification to borrowers who are not eligible for
loan forgiveness under this program be spelled out in greater detail
consistent with the approach in Sec. 685.216(e)(4).
Discussion: The Department believes that the way in which borrowers
apply for and document their eligibility for the public service loan
forgiveness benefit is best handled administratively. We assure the
commenters that we will continue to examine ways to assist borrowers
who are interested in, or already employed in public service, to
determine and document their eligibility for the loan forgiveness
program.
The Department will develop a form for borrowers to use to apply
for the public service loan forgiveness when the borrower believes he
or she qualifies. The proposed form will be subject to public comment
under the Paperwork Reduction Act of 1995. As with other discharge
applications the Department has developed, the form will include all
the information the borrower and the borrower's employer need regarding
the eligibility criteria, applicable definitions, and procedures for
applying for the loan forgiveness benefit. The form will include an
employer certification section and instructions regarding supporting
documentation that the Department will need to determine the borrower's
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eligibility for the forgiveness benefit. The borrower will be able to
use this form to collect a certification from his or her employer
either annually or at the close of the 120-payment qualifying period.
The form will also be used for certification for borrowers who have
more than one employer. The Department expects the borrower to collect
and retain the necessary records that support the borrower's
eligibility for this benefit. This policy is consistent with the
general practice in the student loan programs--borrowers are always
responsible for collecting and maintaining records to support their
receipt of benefits under the programs.
With regard to incorporating a description of the public service
loan forgiveness benefit in the MPN, the Department is already taking
steps to refer to the program in the MPN and other program documents.
However, the MPN will continue to state, as it currently does, that the
terms and conditions of the loans are subject to the HEA as it is
amended in accordance with the effective date of those amendments.
Although there is no history in the program of Congress eliminating or
reducing a borrower benefit, the Department does not believe that a
reference to the public service loan forgiveness program in the MPN
would provide the borrower with a contractual right to the benefit
should Congress take action to eliminate that benefit from the HEA as
of a particular effective date.
Not because I don't want people to save their money, but because I think the government is selling a false dream and people will get suckered into it.
