Press Release

Major Lawsuit Launched Against Betsy DeVos over National Student Debt Debacle

Education Department Deliberately Blocked Access to Public Service Loan Forgiveness, Stiffing Student Borrowers

For Release: 

Thursday, July 11, 2019

Contact:

Andrew Crook
o: 202-393-8637 | c: 607-280-6603
acrook@aft.org

WASHINGTON—A lawsuit suit filed today in federal court spells out in devastating detail how Education Secretary Betsy DeVos deliberately stymied public service workers from accessing a loan forgiveness program they are entitled to under federal law.

The landmark complaint, Weingarten v. DeVos, lays bare the gross mismanagement and out-and-out sabotage of the federal Public Service Loan Forgiveness program by DeVos and her Department of Education. PSLF is a bipartisan loan forgiveness plan signed into law by President George W. Bush. It enables qualifying public service workers to discharge the balance on their loans after 10 years, potentially saving them tens of thousands of dollars.

In unlawfully denying forgiveness, DeVos ignored a litany of lies and misdirection deployed by loan servicers under contract with and overseen by her department.

The suit is brought by eight members of the American Federation of Teachers, the national union itself, and AFT President Randi Weingarten. Many AFT members organized their lives around the promise of loan forgiveness. Instead, they have been sentenced to crushing debt at the hands of DeVos, who has unlawfully deprived borrowers of their most basic due process rights.

The United States is in the midst of a snowballing $1.6 trillion student debt crisis. As of March 2019, less than 1 percent—518 individuals—of those applying for PSLF had received it, compared with more than 32 million American borrowers estimated to be repaying PSLF-eligible loans.

The AFT’s Weingarten said: “Public Service Loan Forgiveness is a right, but Betsy DeVos has turned it into a crapshoot.

“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. DeVos has broken that promise and vindictively—and illegally—blocked their path to the middle class.

“Instead of helping the millions of Americans owed debt relief under the Public Service Loan Forgiveness program, DeVos has hurt and pauperized them. And instead of working with lawmakers to improve the program that millions of teachers, firefighters, nurses and first responders deserve, DeVos has vandalized it.

“While DeVos dithers, millions of public service workers miss car payments, sink deeper into credit card debt and struggle to care for sick relatives. This deliberate sabotage of a bipartisan government initiative cannot be allowed to stand.”

DeVos has failed public service workers like plaintiff Cynthia Miller, who has taught for more than 10 years in a low-income public high school, sacrificing her own education goals so that she could pay back her student loans and contribute to her own children’s education.

DeVos has also failed public service workers like Crystal Adams, a federal employee who has spent the last 10 years paying back her student debt, causing her family to forgo basic needs, like a reliable car. Both Miller and Adams made the requisite 120 qualifying payments, but the Education Department failed to properly count them.

Two of the corporations charged with helping borrowers qualify for PSLF—loan servicers Navient and Nelnet—told plaintiffs Deborah Baker and Kelly Finlaw that they were “on track” for relief even though they had the wrong loan type. Years ago, these plaintiffs could have easily switched their loans to the right type; instead, now, 10 years after working hard in public service and paying down their debt, the Education Department has slammed the door in their faces.

The suit cites repeated violations of the Administrative Procedure Act and the Fifth Amendment’s due process clause. Plaintiffs are seeking immediate loan forgiveness and a court order requiring the Education Department to adopt a process to identify and account for its errors and loan servicers’ misrepresentations, and to give applicants a real opportunity to provide evidence in support of their applications. Plaintiffs also request an order requiring the department to provide sufficient detail supporting its rulings, so borrowers actually understand the basis for the department’s decision.

In October, AFT members sued loan servicer Navient, which serviced borrowers eligible for PSLF on DeVos’ behalf, for damages and injunctive relief in the Southern District of New York. This week, Judge Denise Cote permitted the case to go forward under New York consumer protection law and, crucially, ruled the plaintiffs’ claims are not pre-empted by federal law.

Weingarten v. DeVos was filed Thursday in the U.S. District Court for the District of Columbia. The plaintiffs are represented by Selendy & Gay. The filing is available here.

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The AFT represents 1.7 million pre-K through 12th-grade teachers; paraprofessionals and other school-related personnel; higher education faculty and professional staff; federal, state and local government employees; nurses and healthcare workers; and early childhood educators.