Teachers were told their student loan debt would be cancelled after 10 years of payments, but that didn't happen. Now they're suing Betsy DeVos.

Mack DeGeurin

November 2017 was supposed to be a time of relief and new beginnings for Kelly Finlaw. The New York City middle school art teacher had just completed her 120th payment on her mountainous student loan debt and was preparing to wipe the slate completely clean. Under the 2007 Public Service Loan Forgiveness Program, high school teachers and other government workers like Finlaw were told their remaining debt would be eliminated after 120 successful monthly payments.

But that didn't happen.

When Finlaw checked in about her status after completing what she thought was her final payment, she was informed by her debt servicer that one of the loans she was paying off did not qualify and that she would have to start back over again at zero payments in order to be a part of the debt forgiveness program. She was shocked.

"I had no idea that my loans weren't qualifying," Finlaw told INSIDER. Now she has $88,000 left to pay back.

Starting back at zero, Finlaw will have to wait another decade before the government will forgive her loans. At that point, she'll be nearly 50 years old.

Finlaw's case is not an isolated one. While teachers have filed lawsuits against individual debt servicers for years, the dial was turned up last week. This time, the The American Federation of Teachers union, Finlaw and seven other public school teachers, have joined together to file a lawsuit against the US Department of Education for allegedly mismanaging their loans. The suit calls out education secretary Betsy DeVos by name.

betsy devos

Joshua Roberts/Reuters

In an interview with INSIDER, Lena Konanova, one of the three attorneys representing the teachers, said the lawsuit seeks to hold the Department of Education accountable for a lack of any clear process for government workers.

"Our lawsuit really focuses on the decision making process," Konanova said. "Does the Department of Education grant forgiveness or not, and if it doesn't, if it denies this benefit, what kind of process does it give borrowers to present evidence to rebut that finding." According to stories of the teachers and other government workers listed in the lawsuit, the answer to that question looks like little process at all.

For Finlaw and the other seven workers listed on the suit, Konanova hopes the courts will order the Department of Education to wipe their debt clean.

'We sued Betsy DeVos because it is her responsibility'

In a statement, the union accused DeVos of unlawfully denying loan forgiveness. "Devos ignored a litany of lies and misdirecting deployed by loan servicers under contract with and overseen by her department." DeVos has headed the Department of Education since February of 2017, but the loan forgiveness program was implemented ten years prior to that. In her tenure as education secretary, DeVos has stirred controversy over her support for charter schools and vouchers.

Konanova said the issues with debt relief trace back to the program's inception, but that the lingering ills metastasized during the Trump administration.

"We think they [The Department of Education] did a bad job of it starting in 2007 but it has all come to a head under secretary DeVos," Konanova said. "We sued Betsy DeVos because it is her responsibility. The Department of Education has the ultimate authority to make these decisions."

The loan forgiveness program was originally put in place to encourage workers to flood into public services but since then, say the plaintiffs, it has become bogged down in what has been described as "labyrinthine" requirements.

DeVos has spoken critically of the program in the past, saying it favors some types of jobs over others.

"We don't think that one type of a job, one type of role should be incentivized over another," DeVos said in an April hearing. The Department of Education did not immediately respond to INSIDER's requests for comment.

In the 12 years since the program's inception, over 73,554 teachers and government workers have applied for debt relief. But, since the program began reviewing completed applications in 2017 (following the ten year period in which applicants should have been making their 120 monthly payments), only 864 of those have been approved for debt forgiveness, according to the Department of Education, That's slightly more than 1% of all applicants.

The ATF lawsuit argues that the Trump administration has made a concerted effort to undermine the program by "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," according to a recent Politico article.

"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," ATF president Randi Weingarten said in a statement. "DeVos has broken that promise and vindictively—and illegally—blocked their path to the middle class."

Teachers are hit especially hard by student loan debt

One in every five Americans are currently paying off some form of student loans. For Millennials, that ballooning number inflates even higher to 42%. When all Americans are accounted for, the national student debt hovers around $1.56 trillion. This lingering debt cloud takes an especially hard toll on public school teachers, who are required in nearly all states to have at least a bachelor's degree and whose national average starting salary is just $38,617. In short, teachers are forced to take out large amounts of debt with little income to pay it back.

Finlaw acknowledges that, comparatively, New York City public school teachers earn more than teachers in other states. (According to Niche, the average New York public school teacher earns $79,637 per year). Even with that cushion, the loan payments have take a toll on Finlaw's daily life.

"One entire check is my rent check and then one third of my next check is my student loan bill, so I'm living on two thirds of one paycheck," she said. Finlaw said several of her New York colleagues were also denied loan forgiveness.

Halfway across the country in Tulsa, Oklahoma, high school teacher Debbie Baker also claims she was misled. In an interview with NPR, Baker said she had paid loans for 10 years, constantly checking with her debt servicers to ensure she stayed on the correct path. Then, just like Finlaw, her debt servicer told her she had pulled out the wrong type of loan. Her $76,000 in remaining loans would not be forgiven.

"When this hit ... I didn't know whether to cry, throw up, get mad," Baker told NPR. "I honestly did not think the federal government would do this to someone."

The Department of Education says it can reject loan applicants for four reasons: Missing payments, missing information, a lack of eligible loans or non eligible employment status. Half of all applicants are rejected for failing to meet the 120 month payment requirement and another 25% for missing information. Sixteen percent of applicants were rejected, like Finlaw and Baker, because they had the wrong type of loans.

Finlaw said she is the only member of her family to complete college. Like many students from families where college is not the norm, navigating the various loans and financial aid options can be an uphill battle. Without easy access quality financial advisers, Finlaw said she went and ultimately, "did what [she] had to do," to go to school.

The lawsuit comes during a time of heightened public awareness over rampant student loans. Multiple Democratic presidential candidates have announced sweeping student loan forgiveness plans, including Massachusetts senator Elizabeth Warren, who's proposed plan would eliminate up to $50,000 in debt for household making under $100,000. According to a poll conducted by Morning Consult, 56%of voters support the senator's plan. Warren publicly announced her support for the lawsuit against DeVos on Twitter, one day after it's filing.

@BetsyDeVosED @AFTunion https://t.co/oPCDDxjkid

When asked where she sees this lawsuit heading, Konanova, the attorney, saw two outcomes: one for the government workers as a whole and one at the persona; level for teachers like Finlaw.

"Best case scenario, the plaintiffs have their loans forgiven and a process is put in place to make sure that the millions of other Americans that are impacted by this program get a fair shake," Konanova said.

Even with all that's transpired, Finlaw said she doesn't regret her decision to pursue a career in education.

"Nobody goes into teaching for loan forgiveness and if you do, you shouldn't be teaching," Finlaw said." "I feel like I won the lottery with my life. I have a job I can't believe I'm paid to do. But at the same time, teachers don't make the money for the hours that we put in."

Read more:

Education Secretary Betsy DeVos forced to cancel $150 million in student loans after losing court battle

How a Missouri high school teacher ended up with $410,000 in student loan debt

I'm a teacher — here are 7 things people get wrong about my job

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