Thousands of public servants to get another chance at loan forgiveness in new settlement

Thousands of public servants to get another chance at loan forgiveness in new settlement

Last week, the Biden administration announced it was making a big but temporary fix to the Public Service Loan Forgiveness program, offering a new chance for people who had been turned down for loan forgiveness on a series of technicalities despite making 10 years of payments. But now a settlement in a lawsuit is making an even bigger fix

The lawsuit, brought by the American Federation of Teachers (AFT) on behalf of eight of its members with nearly $400,000 in loans, argued that “borrowers faced rampant servicer misconduct, were issued confusing and sometimes contradictory guidance about the status of their applications, and had no clear process for contesting erroneous decisions,” amounting to an illegal denial of the right to due process. Under the settlement, not only will those eight members see their loans forgiven—after they had all made 10 years of payments while working in public service jobs—but thousands more public servants will get another chance despite having been denied by the program that was supposed to help them.

The Education Department will automatically review applications rejected before November 2020 in cases where the applicant had made 10 years of payments on a direct loan. It will also increase transparency, letting people know how far they are from qualifying for loan forgiveness and what they have to do to finish qualifying. And it will create an appeals process for people who think they shouldn’t have been denied.

Debbie Baker, a choir teacher from Oklahoma, was one of the plaintiffs in the lawsuit. She had the classic story experienced by so many Public Service Loan Forgiveness applicants: After making 10 years of payments on what she thought was a loan that qualified her for the program while working a job that did qualify her, she was rejected for having the wrong loan. She will see more than $80,000 in loans taken off her shoulders thanks to the settlement.

“This is just lifechanging—to be able to go to school and teach every day, and not have to deal with the anxiety and the anguish and the guilt and the feeling of just being trapped by debt,” Baker told reporters. “This is truly, truly lifechanging.”

In a statement released by the AFT, she added, “I made these payments in good faith, and we never should have been put in this situation with thousands of dollars in interest and fees wrongly added by the servicer. To be defrauded like that is not right, especially during a pandemic when I’ve been teaching in person every day. Now, this settlement finally makes things right.”

Under the previously announced temporary changes to the program, people in qualifying jobs have until Oct. 31, 2022 to consolidate their loans into eligible ones and submit paperwork to get the payments they’ve already made counted toward the program rather than being forced to restart the 10-year clock. Those changes are expected to affect more than half a million people.

From Daily Kos at Read More. This article is republished from DailyKos under an open content license. Read the original article at DailyKos.

More News Stories


More Political News