August 5, 2019
By Zack Friedman, Forbes
An educator thought she was on track to receive student loan forgiveness.
She made the payments. She thought she did everything right.
Then, she was told years later that she didn’t qualify.
Here’s what you need to know – and how you can avoid her fate.
New Lawsuit: Student Loan Forgiveness
As first reported by NPR, Debbie Baker, a Director Education at a non-profit organization in Tulsa, Oklahoma, expected that her $76,000 of student loan debt would be forgiven through the Public Service Loan Forgiveness program, a federal program through the U.S. Department of Education that forgives federal student loans for individuals who work in public service.
According to Baker, her student loan servicer – the company responsible for collecting and managing her student loan payments – allegedly told her for nine years that she met all the requirements to receive public service loan forgiveness. As such, Baker thought she would have all her federal student loan forgiven after meeting the program’s requirements, which she believed she met. However, after making her usual monthly payments under an income-driven repayment program, the U.S. Department of Education said she did not qualify for student loan forgiveness. You can imagine Baker’s reaction.
Now, Baker is a plaintiff in a new lawsuit filed by the American Federation of Teachers, one of the nation’s largest teacher’s unions, against the U.S. Department of Education, which is led by Secretary Betsy DeVos. The lawsuit alleges, among other things, that:
- the Public Service Loan Forgiveness program is “grossly mismanaged” and
- the program, as it’s currently administered, violates the Due Process Clause of the Fifth Amendment to the U.S. Constitution
- the U.S. Department of Education is aware that student loan servicers make misrepresentations to borrowers, which results in borrowers getting rejected for student loan forgiveness and suffering financial and other harm.
Was Baker given the wrong information from her student loan servicer? Was it Baker’s responsibility to understand all the requirements of the program? Is the program administered properly? What is the proper role of student loan servicers – advisors or student loan payment collectors? Many of these issues may be addressed as a result of this lawsuit.
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