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The Adams administration on Monday announced a pilot initiative that will help city employees enroll in the Public Service Loan Forgiveness Program, a federal program that clears outstanding balances on some student loans for employees of government or not-for-profit organizations.
The city has partnered with Summer, an organization that provides student loan and education assistance, to assist city workers with applying for and completing federal student loan forgiveness and income-driven repayment plans. City workers will receive free guidance from Summer to verify their eligibility for PSLF, as well as help staying on track for having their loans forgiven.
The pilot, which launched Monday for employees at the Administration for Children’s Services, Department of Social and Services and the Housing Authority, will expand to include all qualified city employees in September. The city’s initiative was announced the day the Trump administration resumed collections of defaulted federal student loans.
The Adams administration has estimated that more than 100,000 city workers are eligible for federal student loan relief, and that the program would help wipe out $360 million in student loan debt.
The commissioner of the Department of Consumer and Worker Protection, Vilda Vera Mayuga, noted how her years in public service helped free her from debt, just two years ago, accumulated from having attended law school.
“My graduation day in 1998, many years ago, was one of my proudest days of my life. But I remember just how quickly that joy just turned into anxiety when I found out … I had all this debt now to repay, somehow, at some point,” she said.
“For years, I doubted myself and my choices,” Mayuga continued, before detailing how the PSLF program helped get her out of debt, 25 years after graduating. “I still have difficulty expressing my gratitude, but the unfortunate reality is that I know my story is not unique. More than 42 million Americans have federal student loans. … Those in public service make so many sacrifices to serve their neighbors, but choosing to serve your community shouldn't come at the cost of your financial health.”
Loans ‘should not be a barrier’
Noting the challenges that student loan debt can pose, Mayor Eric Adams said city dollars can be brought to bear on easing those burdens and making the city more affordable to more people. He echoed Mayuga, noting, as he often does, that municipal workers keep the city running. They shouldn’t have to do so while dragged down by debt, he said.
“Student loans should not be a barrier to pursuing a lifetime of financial success. Expanding access to the Public Service Loan Forgiveness program is an important way we can set city employees up for long-term financial freedom and put money back in their pockets. I know firsthand how liberating that can be,” he said at Monday’s announcement. “We must be clear on how we bring the resources we fight for. We got it, now they must get it. And everyday people live in the dark winter of student loans. It's good to know that we have a Summer.”
Family members of city workers who qualify for the PSLF — including those working in the state or federal government — will also be able to participate in the program.
Public servants working in local, state or federal jobs who make 120 student loan payments are qualified to have the remainder of their student loan forgiven through the PSLF program. But since 2017, just 11 percent of borrowers who submitted loan forgiveness forms have had their loans wiped out.
Many city employees have not even enrolled in the PSLF or IDR programs, according to the Adams administration.
An analysis by TransUnion published Monday found that 20.5 percent of federal student loan borrowers were considered “seriously delinquent,” or more than 90 days past due, 9 percentage points more than just prior to the pandemic.
The Adams administration noted that the program would help stimulate New York City’s economy by freeing up public workers’ income that would have gone towards loan repayments.
The partnership between the city and Summer — which has secured more than $1.8 billion in student loan savings — is “the largest of its kind implemented by any municipal government,” the Adams administration stated.
Department of Citywide Administrative Services Commissioner Louis Molina said student loans should be a barrier to public service and he encouraged city workers to reap the program’s benefits.
“As you have heard, this resource elevates a large financial burden, but it also provides an invaluable mental clarity. In this, the impact of this initiative will be deeply and widely felt. Knowing that 100,000 individuals will soon benefit from the access to countless tools and tailored guidance for student loan payment, I am filled with immense joy this morning,” he said. “Public servants are at the heart of our great city, and these are the resources that [they] have undoubtedly earned.”
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