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AFT sues Education Department over loan forgiveness program

July 12, 2019
The teachers union contends that the department has mismanaged a program that is supposed to forgive student loans given to public service workers who have made 10 years of payments.

One of the nation’s largest teachers unions is suing U.S. Education Secretary Betsy DeVos, accusing her agency of mismanaging a program intended to provide student loan forgiveness to public service workers.

Politico reports that the American Federation of Teachers is arguing that the education department has improperly rejected the applications of teachers seeking public service loan forgiveness and has violated their constitutional right to due process.

AFT President Randi Weingarten and eight student loan borrowers who are teachers or work in public service jobs are named as plaintiffs in the suit.

The Public Service Loan Forgiveness program, which was passed by Congress in 2007, was designed to allow student loan borrowers who work in public service jobs to have their loans discharged after they make 10 years of payments.

But relatively few borrowers have been able to obtain the benefit in recent years—the Education Department has rejected roughly 99 percent of applications. That's left tens of thousands of frustrated borrowers with student loans they thought would be forgiven after they worked a decade on the job.

The department has asserted that the applications are being rejected because borrowers have not met the eligibility requirements of the program.

The AFT’s lawsuit, filed in Washington, D.C., accuses the education department of arbitrarily and capriciously rejecting loan forgiveness applications, failing to properly oversee the loan servicers it hires to administer the program, and denying borrowers the loan forgiveness benefit without due process.

“Instead of helping the millions of Americans owed debt relief under the Public Service Loan Forgiveness program, DeVos has hurt and pauperized them,” Weingarten said in a statement. “And instead of working with lawmakers to improve the program that millions of teachers, firefighters, nurses and first responders deserve, DeVos has vandalized it.”

Education Department spokesperson Liz Hill said the department “doesn’t comment on pending litigation,” but added that the agency “is faithfully administering the complex program Congress passed.”

DeVos has previously said that Congress, not the education department, has caused some of the problems by creating a complicated set of restrictions on which types of loans and loan repayment plans are eligible for public service loan forgiveness. 

The lawsuit seeks a court order requiring the education department to create a better process to handle the program.

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