Caught in Limbo: AFSCME Member Struggles with Student Loan Forgiveness

As a public librarian for the Philadelphia Free Library, Sheila O’Steen embodies what we think of when we imagine a public service worker. Every day, she interacts with members of her community. Whether her patrons are young or old, affluent or impoverished, O’Steen shares knowledge and information with everyone she serves.

“I want to give my community whatever it needs – access to information, relevant programming, and an inviting community space,” says O’Steen, a member of AFSCME Local 2186 (District Council 47). Recently, as a branch manager, she’s been innovating by providing programs to children and adults about culinary literacy.

After 10 years as a librarian, O’Steen feels fulfilled in her job, and remains committed to the calling of public service, though she knows it will never make her wealthy.

In 2008, she learned about a federal program called the Public Service Loan Forgiveness (PSLF), which seemed tailor-made for public service workers like her, a way to rise above the burden of student loans she’d taken on for her undergraduate and graduate degrees in library and information sciences.

O’Steen learned that to participate in PSLF she’d be required to continue her career in public service for at least 10 years and make a total of 120 timely student loan payments under a qualified repayment plan. At the end of those 10 years, she – and other public service workers like her who enrolled – would have the balance of their student loans forgiven.

PSLF was a way for the government to encourage people to pursue careers in public service, and a way for those in public service, many of whom gave up more lucrative salaries in the private sector, to rise above the student debt they’d shouldered to serve our communities.

For O’Steen, PSLF seemed like the perfect fit.

A Nightmare Begins

Prior to her enrolling in PSLF, representatives at the Department of Education had told O’Steen she would need to consolidate her undergraduate and graduate school loans. They consolidated her loans into a standard extended 30-year loan repayment plan since it offered the lowest monthly payment. Eventually, her loan was transferred from the Department of Education to a different loan servicer. She kept up with her on-time payments, dreaming of the day when the weight of student loans would fall away.

“I would pay every month,” said O’Steen. “It was all done over the phone. They just said, ‘Pay on time and every payment plan counts.’”

Unbeknownst to O’Steen and many other public service workers who had enrolled in PSLF, due to mismanagement by the Department of Education as well as confusing and misleading rule changes by the government, the loan repayment plan she’d been placed in didn’t qualify under the PSLF program. She needed an income-based repayment plan, not the standard extended repayment plan that she was in. Four years of payments, she was told by Education Department, would not count toward loan forgiveness.

“I was crying when they said none of those payments counted,” O’Steen said. “They told us we lost those years. There was nothing we could do.”

What O’Steen didn’t know was that tens of thousands of other public service workers were facing the same crisis, a crisis that would soon gain wider attention.

Temporary Relief is not Enough

As a result of the widespread failure and confusion surrounding the PSLF, Congress funded the Temporary Expanded Public Service Loan Forgiveness program (TEPSLF), which was meant to help borrowers who were having trouble with the original PSLF. The hope was the new program would decrease the staggering number of PSLF applicants who were rejected.

“I thought PSLF was a scam and that the government should do more to back what it promised to public service workers. I was optimistic when the TEPSLF was put forth,” said O’Steen. “I thought, ‘This program is designed for people like me those who were put in the wrong repayment plan.’”

However, O’Steen’s odyssey through the Department of Education’s bureaucracy continued. Despite call after call, review after review, O’Steen couldn’t get a straight answer as to where she stood with her loan payments.

The Education Department’s mishandling of loan payment records “is affecting whether dedicated public service workers can buy a house, retire on time, start a family,” says O’Steen.

O’Steen’s frustration led her to share her story with her congressman, Rep. Brendan Boyle. Boyle’s office contacted the Department of Education to help his constituent, and by the end of September, O’Steen’s loan was forgiven under TEPSLF. But not every public service worker has been that lucky.

Keeping America’s Promise to Public Service Workers

Engaged public service workers like O’Steen are part of a broad push to repair the PSLF, including a bill that has been introduced in the House of Representatives by Rep. Bobby Scott (D-Va.).

The College Affordability Act would make it easier for borrowers to repay loans, offer loan forgiveness to those who’ve applied but have been wrongly rejected and simplify the overly complex program.

By fixing the PSLF, public service workers will be able to focus less on navigating a broken system and more on doing what they do best: serving their communities.