Public Service Loan Forgiveness is denied on “arbitrary and capricious” grounds, argues a lawsuit filed Thursday. The education union The American Federation of Teachers (AFT) has sued Education Secretary Betsy DeVos for mismanaging the program.
The Public Service Loan Forgiveness program has actually forgiven loans of about 1% of the 73,000 people who have applied for the program since its inception in 2007. The program is designed to forgive the student loan debt of people who work in a public service field, like education, and make ten years of payments. The Trump Administration is not keen on the program, which it proposed eliminating in its 2020 budget plan.
“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,” said AFT president Randi Weingarten in a statement.
The Department of Education has blamed Congress for the issue, citing complicated restrictions on who is and is not eligible for loan forgiveness as part of the program. In December, it launched an online tool intended to help borrowers determine if they are eligible for loan forgiveness. Although the Department would not directly comment on the litigation, it argued that it is “faithfully administering the complex program Congress passed.”
But that narrative is somewhat complicated by DeVos and President Trump seeking to eliminate or cut the program altogether. Lawmakers have accused DeVos of being the roadblock to reforming the legislation, especially in a time when public service jobs desperately need to be filled nationwide. Congress even set aside funds to fix the problems with properly enrolling in the program.
The complexity of the program is a complaint of many borrowers, who have found its rules hard to navigate and often only find out they don’t qualify after their ten years of payments are up. Department of Education data shows half of applicants that have been rejected did not have enough qualifying payments, while a quarter had missing information, and 16% didn’t have eligible loans.
A host of 2020 Democratic hopefuls have cosponsored legislation to expand the program — half the debt would be repaid at the five year mark and the other half at the current ten year mark — as a means to encourage public service employment and help ease the burdens of student debt.
Katelyn Kivel is a contributing editor and senior legal reporter for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.