A8
BUSINESS
East Oregonian
Saturday, July 13, 2019
Teachers sue U.S. over unforgiven student loans
By CHRIS ARNOLD
Oregon Public Broadcasting
TULSA, Okla. — Debbie Baker
thought she qualified for a federal
program that helps teachers like
her as well as nurses, police offi-
cers, librarians and others. The
Department of Education program
forgives their student loans if they
make their payments for 10 years
and work in public service.
For 10 years, Baker, who was
a public school teacher in Tulsa,
Oklahoma, checked in with loan
servicing companies and was told
she was on track.
“I said I’m qualifying for public
service loan forgiveness and they
said, ‘OK, great,’ ” she says.
But it turns out that her $76,000
in student loans didn’t get for-
given. Baker was finally told she
was in the wrong type of loan. If
she’d known that at the beginning,
she could have switched loans and
ended up qualifying. But she says
nobody ever told her.
“When this hit … I didn’t know
whether to cry, throw up, get mad,”
she says. “I honestly did not think
the federal government would do
this to someone.”
Now, Baker is a plaintiff in a
lawsuit being brought by one of
the biggest teachers unions in the
country against the Department
of Education. The suit alleges the
loan forgiveness program for mil-
lions of public service workers is
in such a shambles that it violates
federal law and the Constitution.
The American Federation of
Teachers is planning to file the law-
suit Thursday in federal court. In a
draft of the complaint obtained by
NPR, the union is asking the court
to order the department to fix the
Public Service Loan Forgiveness
program so that it meets legal stan-
dards. It’s also asking the depart-
ment to come up with an appeals
process for people who believe
they have been treated unfairly.
Congress created the program
more than a decade ago to encour-
age public service. So, if you make
loan payments for 10 years and
you work in a qualifying job for
the government or a nonprofit, the
program promises to forgive the
remainder of your student loan
debt.
That promise sounded really
good to a lot of people. More than
a million have filed official paper-
work to take part in the program.
But there’s a problem.
“The promise is broken, vir-
tually all the time,” says Randi
Weingarten, the president of the
American Federation of Teachers.
OPB Photo
Debbie Baker thought she qualified for a federal program that helps teachers like her as well as nurses, police
officers, librarians and others. The Department of Education program forgives their student loans if they make
their payments for 10 years and work in public service.
“This is a debacle.”
Plenty of consumer watchdogs
agree.
“The Department of Educa-
tion just cannot seem to get this
right,” says Christopher Peterson,
a law professor at the University
of Utah and a former top attorney
at the Consumer Financial Protec-
tion Bureau. “They keep making
mistakes and are not appropriately
administering this program that
Congress has created.”
By the department’s last count,
only 1% of the people who think
they’ve made their 10 years of pay-
ments and apply for loan forgive-
ness are getting approved.
If you took all the people get-
ting rejected and got them together
in one place, Peterson says, you’d
have “football stadiums full of
nurses, firefighters, teachers, law
enforcement officers that are seek-
ing to have their debts forgiven.”
He says they’ve made “all of
these payments under the impres-
sion that they were on track, and
now they’re being turned away in
droves.”
As happened with Debbie
Baker, if a student loan borrower
is in the wrong type of loan, or
the wrong type of repayment plan,
they can’t qualify for loan for-
giveness. The teachers union law-
suit alleges that the Department of
Education “knows of — but com-
pletely disregards — repeated mis-
representations made by Title IV
servicers to borrowers who are
attempting to qualify … result-
ing in unwarranted denials of loan
forgiveness.”
In other words, people like
Baker aren’t given the right infor-
mation or advice, and many end
up in the wrong types of loans or
repayment plans and get unfairly
disqualified. Government reports
and investigations have found sim-
ilar problems with borrowers get-
ting bad information.
The lawsuit also alleges that
loan servicers are having trouble
keeping track of the number of
qualifying payments people make
— even when they are in the cor-
rect loan and payment plan and
manage to do everything right.
Weingarten says the program
is hurting the very people it’s sup-
posed to help. “It is so broken, it is
so unfair that it violates our basic
United States Constitution require-
ment of due process,” she says.
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Another problem with borrow-
ers getting rejected after many
years of thinking they were on
track, is that many make life deci-
sions based on the expectation of
loan forgiveness.
Janelle Menzel is a high school
math teacher in Brainerd, Minne-
sota. She says people would ask
her: “You have a degree in math,
why are you teaching?” She says
they would tell her she could
make “so much more money in
the private sector.”
Menzel says she loves teach-
ing. And she thought she was
going to get her student loans for-
given, so financially she decided
it made sense. “Oh yeah, defi-
nitely. That was a factor in it,” she
says.
But just like Baker, Menzel
says that after 10 years of mak-
ing payments, she was told by her
loan servicer that she was in the
wrong type of loan and therefore
couldn’t qualify. She remembers
after contacting her loan servicer
repeatedly, trying to find a way to
appeal, a call center worker told
her, “Look, you just need to give
up.”
“And I remember sitting at
the table watching my kids run-
ning around and playing and just
thinking man, I am stuck with
this now,” Menzel says. Thoughts
of “the freedom that would come
with being released of the student
loan debt kind of came crashing
in in that moment,” she adds.
Congress passed a partial fix,
called Temporary Expanded Pub-
lic Service Loan Forgiveness, that
was designed to help at least some
borrowers. But the teachers union
lawsuit alleges the Department of
Education “has mismanaged [that
program] as well.” As of March
2019, only 3.6% of applications
for that new program have been
approved.
The Department of Education
has not yet commented on the
lawsuit.
Navient, one of the nation’s
largest loan servicer companies,
is not commenting on the lawsuit.
But the company said in a state-
ment to NPR, “We understand
the frustration borrowers face in
navigating a complex federal loan
program, which is why we consis-
tently advocate for policy reforms
to simplify the system.”
The Department of Educa-
tion recently implemented a
dramatic fix to a different pro-
gram, TEACH Grants, that’s now
returning grant money to thou-
sands of people who had grants
taken away unfairly.
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