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The AFT brought the student debt crisis to court Thursday, filing a lawsuit against Education Secretary Betsy DeVos and the Department of Education for gross mismanagement and out-and-out sabotage of the federal Public Service Loan Forgiveness Program. This bold move could serve justice to millions of Americans who work in public service jobs and who are suffering under a crushing burden of student debt.
PSLF enables qualifying public service workers like AFT members—teachers, college faculty and staff, health professionals, and other public sector workers—to discharge the balance on their student loans after 10 years. But the program has failed to deliver on this great promise because loan servicers continue to misdirect and neglect the borrowers they are assigned to help.
Instead of guiding borrowers toward more efficient payoff plans and debt forgiveness through PSLF, the companies withhold information and mislead borrowers so that the loan servicers can continue to collect payments and mounting interest; their greed has cost borrowers unfathomable amounts of money in interest, and DeVos has ignored the companies’ deplorable behavior—despite the fact they are under contract with and overseen by her department. The lawsuit, Weingarten v. DeVos, which is brought by eight AFT members, AFT President Randi Weingarten and the national union, seeks immediate loan forgiveness and a court order requiring the Education Department to adopt a process to identify and account for its errors and loan servicers’ misrepresentations.
Initiated by George W. Bush in 2007, PSLF is a not just a promise, it’s an entitlement by law. “Betsy DeVos has turned it into a crapshoot,” says Weingarten. “Twelve years ago, Congress made a bipartisan commitment to help millions of workers pay off their student loan debt as recognition for their dedicated public service. DeVos has broken that promise and vindictively—and illegally—blocked their path to the middle class.
“Instead of helping the millions of Americans owed debt relief under the Public Service Loan Forgiveness Program, DeVos has hurt and pauperized them. And instead of working with lawmakers to improve the program that millions of teachers, firefighters, nurses and first responders deserve, DeVos has vandalized it.”
Plaintiff Kelly Finlaw, an art teacher in New York City, lost credit for 10 years of payments because her loan servicer never told her that one of her consolidated loans didn’t qualify. She had to reconsolidate and start over. “I have $88,000 of student loan debt, and I am at the bottom,” she says.” I have spent so much time on my own trying to make this right, and I’ve come to the end of the line as far as what I can do for myself.”
Plaintiff Gloria Nolan is similarly frustrated. The first in her family to attend college, she faithfully paid off her debt for six years, and was sure she would be eligible for PSLF. Her loan servicer had neglected to tell her, however, that her payment plan did not qualify. She too had to start over from scratch.
“It’s hard to reconcile being told that you can achieve the American dream, you just have to pull yourself up by your bootstraps,” says Nolan. “This process is setting those boots in cement. That’s just not fair, that’s not right.”
PSLF has also failed public service workers like plaintiff Cynthia Miller, who has been teaching for more than 10 years in a low-income public high school, sacrificing her own education goals so that she could pay back her student loans and contribute to her children’s education, and Crystal Adams, a federal employee who has spent the last 10 years paying back her student debt, causing her family to forgo basic needs, like a reliable car. Both made the 120 payments required for PSLF, but the Education Department failed to properly count them.
“While DeVos dithers, millions of public service workers miss car payments, sink deeper into credit card debt and struggle to care for sick relatives,” says Weingarten. “This deliberate sabotage of a bipartisan government initiative cannot be allowed to stand.”
The AFT has also gone after the loan companies themselves: In October, AFT members sued loan servicer Navient, one of the worst offenders, and although the judge denied most charges, the case moved forward in early July.
The Weingarten v. DeVos case is available here.
[Virginia Myers]