DeVos sued over student loan forgiveness program that denies 99 percent of applicants

By Michael Stratford

One of the nation’s largest teachers unions filed suit Thursday against Education Secretary Betsy DeVos, accusing her agency of mismanaging a major program intended to provide student loan forgiveness to public service workers.

The American Federation of Teachers claims the Education Department has improperly rejected the applications of teachers seeking public service loan forgiveness and 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, which was filed in federal court in Washington, D.C.

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, as 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 said that the applications are being rejected because borrowers have not met the eligibility requirements of the program.

The AFT’s lawsuit accuses the Trump administration 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 in an email that 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 Education Department in December created an online tool that was meant to help borrowers better understand whether they qualify for the program.

The AFT’s complaint asks the judge to approve the applications of the named borrowers in the case. It also seeks a court order requiring the Education Department to implement a better process to handle the program and forcing the agency to provide “written and reasoned decisions supporting its determinations” on loan forgiveness applications.