Department of Education Releases New Public Service Loan Forgiveness Application Data

Archived Information

Department of Education Releases New Public Service Loan Forgiveness Application Data

August 22, 2016

The U.S. Department of Education's Office of Federal Student Aid (FSA) today posted a series of updates to its Data Center, a collection of key performance data on the student loan portfolio.

For the first time, the Data Center will include metrics on applications received for Public Service Loan Forgiveness (PSLF). Additionally, new data reveal that more borrowers are enrolling in income-based repayment plans as new defaults and delinquency rates continue to fall.

Since the Department implemented its voluntary process to assess borrowers' potential eligibility under the PSLF program, almost a million applications have been submitted and two-thirds have been approved. Once approved, borrowers can have the remaining balance on their Direct Loans forgiven after making 120 monthly payments under a qualifying repayment plan while working full-time for a qualifying employer, such as a government organization or a not-for-profit.

"Today's report demonstrates measurable progress in our efforts to help borrowers successfully manage repayment," said U.S. Secretary of Education John B. King Jr. "We want to ensure that those Americans who have devoted a decade of their careers to public service are not burdened by debt while making invaluable professional contributions to their communities."

For many college students, the dream of working in public service, as a teacher, nurse, public health official, or at a non-profit organization comes with a worry that their salary will not be enough to allow them to pay back their loans and pay their bills.

Borrowers who meet requirements of the program will see remaining outstanding balances forgiven beginning in October 2017. The PSLF program originated in 2007 when Congress passed the College Cost Reduction and Access Act.

The Obama Administration remains committed to helping borrowers successfully manage repayment. Income-driven repayment plans, including the President's Pay As You Earn (PAYE) plan, enable borrowers to cap payments at 10 percent of their income and forgive any remaining debt after 20 years. Those who are employed in public service may be able to receive forgiveness in half that time, after making 10 years of payments while meeting PSLF requirements.

Other highlights of the latest Quarterly Student Aid Report:

  • Enrollment Increases in Income-Driven Repayment Plans – Enrollment in Income-Driven Repayment (IDR) repayment plans such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE) continues to increase. As of June 2016, nearly 5.3 million Direct Loan borrowers were enrolled in IDR plans, a 36 percent increase from June 2015 and a 110 percent increase from June 2014.
  • New Defaults Decline – For the third consecutive quarter, new Direct Loan defaults have decreased as a percentage of recipients in repayment the previous quarter. During the most recent quarter (FY2016 Q3), about 260,000 borrowers or 1.7 percent of recipients who were in repayment last quarter entered default, compared with 2.1 percent a year ago.
  • Delinquency Rates Fall – Likewise, both Direct Loan and Education Department-held Federal Family Education Loan (FFEL) delinquency rates fell compared to the same time period last year. The rate of Direct Loans delinquent for 31 days or more (31-day+) has seen year-over-year decreases of 11.4 percent by recipient count and 9.4 percent by total dollar balance. As of June 2016, the active repayment 31-day+ delinquency rate for Direct Loans was 18.6 percent by recipient count and 14.4 percent by total dollar balance compared with 21 percent and 15.9 percent a year ago.
  • $14.1 Billion in Default Recoveries – For FY2016 through the quarter ending June 30, the Department has collected approximately $14.1 billion in defaulted student loans, including nearly $7.4 billion recovered by guaranty agencies and $6.7 billion by private collection agencies. $9.5 billion (or more than 67%) of total recoveries were due to successful loan rehabilitations.
  • Decreased Application Volume – Historically, submissions of the Free Application for Federal Student Aid (FAFSA) have been impacted by unemployment rates. Since unemployment has slowed following the Great Recession, FAFSA submissions have also decreased. In the first six months of the 2016-2017 application cycle, 13.2 million FAFSAs were submitted, a 3.5 percent decrease from the same time period last year. The 2015-2016 application cycle, which ended June 30, experienced a similar decline in applications compared with the 2014-2015 cycle.

The Office of Federal Student Aid proactively posts quarterly reports to ensure consistency, increase transparency and establish self-service opportunities for interested stakeholders.