Fast Facts

The Public Service Loan Forgiveness program is intended to encourage people to enter public service. It forgives the federal student loan balances of eligible borrowers who have made at least 10 years of payments while in certain public service jobs.

The Department of Education denied 94% of program applicants from the Department of Defense. (We previously found a 99% denial rate for all applicants.) The most common denial reasons were not enough payments and incomplete applications.

We made 5 recommendations for DOD and Education to increase awareness of the program and its requirements by sharing information and collaborating with each other.

Few Department of Defense applicants were approved for the Public Service Loan Forgiveness program.

Graphic showing 5,496 DOD borrowers applied for the Public Service Loan Forgiveness program but only 287 were approved.

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Highlights

What GAO Found

Personnel in the Department of Defense (DOD)—including service members and civilian employees—may be eligible for federal student loan forgiveness through the Public Service Loan Forgiveness (PSLF) program if they remain in public service employment for 10 years while making 120 qualifying loan payments, among other requirements. As of January 2020, Department of Education (Education) data show that 287 DOD borrowers received loan forgiveness, while 5,180 DOD borrowers (about 94 percent) were denied (see figure). The most common reasons for the denials were not enough qualifying payments and missing information on the form. GAO previously reported in September 2019 an overall denial rate of 99 percent for all PSLF applications submitted by borrowers. More information from DOD could help potential applicants be aware of all eligibility requirements.

Number of Department of Defense (DOD) Personnel Approved or Denied for Public Service Loan Forgiveness (PSLF), as of January 31, 2020

highlights_5_v10_103817-01

Note: The “Civilian” categories include all civilian employees within DOD, including the military services.

As its administrator, Education has specialized knowledge about the PSLF program but has not shared complete information with DOD. Education officials have not shared with DOD summary information about its personnel who have taken steps to pursue PSLF or service members who may be eligible. Education officials also stated they have not shared the benefits of using the PSLF program together with DOD's student loan repayment program. Education officials have also not updated the student loan guide for service members with specific information on PSLF. Education could take additional steps to improve information sharing about PSLF with DOD personnel. DOD officials expressed interest in obtaining more program information. Collaboration among the departments and updated program information could help DOD officials and its personnel to take full advantage of PSLF.

DOD does not widely use the PSLF program for recruitment and retention to promote readiness despite facing challenges in certain specialty career fields. Some DOD officials we interviewed stated that they preferred to use other DOD benefits and incentives that DOD directly controls, such as bonuses or DOD's student loan repayment program. DOD could enhance its recruitment and retention efforts to promote readiness with department-wide and service-specific guidance about how the PSLF program could be used as a tool for such efforts.

Why GAO Did This Study

At a time when student loan debt continues to mount for many, the PSLF program—established in 2007 and administered by Education—is intended to encourage individuals to pursue careers in public service.

Senate Report 116-48 included a provision for GAO to study the effectiveness of the PSLF program at promoting military and civilian recruitment and retention as well as military readiness. GAO's report assesses the extent to which (1) DOD personnel pursue and receive loan forgiveness through the PSLF program, (2) Education has shared information with DOD officials and its military and civilian personnel about the program, and (3) DOD uses the program for recruitment and retention to promote readiness.

GAO analyzed student loan data from Education and the PSLF servicer from the beginning of the program through January 2020; reviewed relevant laws, documents, and other information related to PSLF, benefits, recruitment, retention, and readiness; and interviewed DOD and Education officials.

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Recommendations

GAO is making five recommendations to increase information sharing about the PSLF program. These include that DOD provide information to its personnel and issue guidance to its officials about the program, and that Education and DOD collaborate to share information about the program. Education concurred and DOD partially concurred with the recommendations, which GAO continues to believe are valid, as discussed in the report.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Personnel and Readiness shares additional information about the PSLF program, including its eligibility requirements and application process, with DOD military and civilian personnel. For example, DOD could update its benefits webpages to include details on the program's eligibility requirements and application process. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Education The Secretary of Education should ensure that the Chief Operating Officer of the Office of Federal Student Aid collaborates with officials in the Office of the Under Secretary of Defense for Personnel and Readiness to share information about the PSLF program, including current information on program participation and eligibility, PSLF program requirements, and the potential to pursue PSLF and DOD's student loan repayment. For example, Education and DOD could use interagency groups or agreements to help improve information sharing among department officials and with military and civilian personnel. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Personnel and Readiness collaborates with officials in Education's Office of Federal Student Aid to disseminate information about the PSLF program, including current information on program participation and eligibility, PSLF program requirements, and the potential to pursue PSLF and DOD's student loan repayment. For example, DOD and Education could use interagency groups or agreements to help improve information sharing among department officials and with military and civilian personnel. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Education The Secretary of Education should ensure that the Chief Operating Officer of the Office of Federal Student Aid updates the student loan guide for service members to provide information on applying for the PSLF program and its temporary expanded process, as well as the steps borrowers can take to count their annual payment from DOD's student loan repayment program as multiple qualifying payments for the PSLF program. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Personnel and Readiness issues guidance to DOD and military service officials, such as front-line managers and human resources employees, about how the PSLF program could be used as a tool for recruitment and retention to promote readiness. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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