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Department of Education being sued by Teachers

First states and now teachers are suing the Department of Education for the faulty program intended to help student loan borrowers: the public service loan forgiveness program.  Previously last summer, four states including California, Pennsylvania, Washington, and Illinois sued the government agency Navient for its mismanagement of private and federal student loan debt, especially for the applications to the public service loan forgiveness program. Later, four Democratic Senators: Tim Kaine, Sheldon Whitehouse, Tammy Duckworth, and Maggie Hassan sent a letter to DeVos accusing her of “significantly and needlessly restricting access” to the program.

The program has also been investigated for fraudulent and misleading behavior by its employees by steering away borrowers towards options less fitted to their finances, claiming that the borrower did not qualify when in fact they did.  The New York Times found that the program had a rejection rate of 99.3%.  What is especially concerning is that the program was granted $2.3M to increase outreach in 2018, to which the senators inquired as to how that money was being spent. They did not receive an answer.

Now, the DOE is in the press again after being sued by the The American Federation of Teachers (AFT), for the allegation that the “government’s loan forgiveness program for public service workers does not function properly” (Yahoo Finance).

Yahoo Finance reporters Aarthi Swaminathan and Reggie Wade wrote in a recent article about the lawsuit: “A recent survey by social app Fishbowl — which looked at 10,284 responses from graduates — found that nearly 65% of teachers have student debt.”

Kyle McCarthy, head of growth at Fishbowl made the point that many teachers pay out of pocket for school supplies where the DOE does not provide the school funding to provide these items, and so they are making even less income than many other industries with their amount of student debt.  In 36 states and D.C., teachers are required to have earned a master’s degree alongside their bachelor’s before they can have a teaching license.

The Public Service Loan Forgiveness program was signed into law in 2007 by George W. Bush to encourage people to enter the public service sector. Borrowers would enter into the program and make monthly payment for 10 years, after which the rest of their debt would be forgiven. However, one missed payment would disqualify a person from the program. Worse, some borrowers had finished all 10 years of payments and still be denied loan forgiveness over some technicality or negligence allegation.

Hopefully this lawsuit will push for more change and reform within the program and the DOE that has been woefully mismanaged by DeVos against teachers and students alike.

Image credit: Gage Skidmore via Flickr

Source: 

https://finance.yahoo.com/news/teachers-sue-department-of-education-over-student-debt-broken-promises-132531064.html

https://www.nytimes.com/2018/06/28/business/navient-student-loans-california.html#targetText=California%20would%20be%20the%20fourth,or%20backed%20by%20the%20government.