In 2007, The Public Service Loan Forgiveness Program was enacted. This program promises to forgive the student loans of those who work in a variety of public service jobs.
“The program generally covers people with federal student loans who work for 10 years at a government or non-profit organization, a diverse group that includes public school employees, museum workers, doctors at public hospitals and firefighters. The government approved the program in 2007 in a sweeping bipartisan bill.”
Many people find it rewarding to work in careers like social work, but these jobs usually reap few monetary benefits, and often, people have taken out high amounts in student loans. So, this program seems like a great way to cancel that burden of debt. Right?
Well, maybe. Maybe not.
Apparently, it is becoming a sea of murky water for many of those who have been approved for the program. People are starting to have some serious questions about whether the Department of Education will truly follow through on its promises to actually forgive their loans.
Four borrowers and the American Bar Association recently filed a suit in the United States District Court in Washington against the department. The four plaintiffs were initially told their jobs qualified for student loan forgiveness, but later received letters saying the ruling had changed.
FedLoan is the entity responsible for servicing the loans, and borrowers are encouraged to submit a certification form to them each year. According to Education Department data, fewer than 553,000 borrowers have submitted at least one certification form to FedLoan and received its approval.
One of the plaintiffs, Mr. Jamie Rudert, submitted his certification form in 2012. He then received a letter saying that his work as a lawyer at Vietnam Veterans of America, a non-profit group, qualified him for loan forgiveness. However, in 2016, after he submitted another certification form, he got a denial letter saying none of his previous work would be considered valid for the loan forgiveness program.
After Rudert filed a complaint with the Consumer Protection Bureau, FedLoan finally responded by saying that his application had “initially been approved in error.”
Rudert said:
“It’s been really perplexing. I’ve never gotten a straight answer or an explanation from FedLoan about what happened, and the Department of Education isn’t willing to provide any information.”
Since he did not find a way to appeal this decision, he and the American Bar Association filed a suit in December, 2016, against the Education Department. Mr. Rudert graduated owing nearly $135,000 in student loans and said he would have chosen another employer had he known that his work would not qualify.
Rudert did leave the Vietnam Veterans of America in 2015 and is currently working for an organization that does very similar work, which was approved for the loan forgiveness program.
This raises many questions for students who are considering a public service career due to the loan forgiveness program. Those who are already approved may be living with a false sense of security that their debt will be forgiven.
For some applicants, that is a huge wager since their monthly loan payments could turn out to be a large percentage of their salaries. Maybe the lawsuit will help to achieve much needed clarification and restore confidence in the program.
Featured Image By Pexels/Public Domain.
