One of America’s largest teachers’ unions and the Department of Education (ED) have announced an agreement on a key loan forgiveness program used by public service workers.
The American Federation of Teachers (AFT) hailed the “historic settlement” in Weingarten v. DeVos – originally filed in July 2019 and titled after AFT President Randi Weingarten and former Education Secretary Betsy DeVos – as an agreement that “will hold the federal government accountable for its failure to manage the education program. remission of public service loans. “
The news comes a week after ED announced a series of major changes to the notoriously troubled PSLF program.
“This agreement unties the Gordian knot of PSLF implementation and shows the power of advocacy and collective action,” Weingarten said in a statement, adding, “It represents a decisive victory for millions of educators, nurses, public sector workers and others AFT members grapple with life-changing monthly payments that have turned their heads upside down. And it gives muscle and bite to the reforms of the Ministry of Education at the PSLF announced last week.
‘A day that I never thought would arrive ‘
The PSLF program, created by Congress in 2007, allows government and nonprofit employees on federally backed student loans to request a rebate upon proof of 120 monthly payments under a qualifying repayment plan. .
Yahoo Finance recently detailed the immense difficulties faced by a professor navigating the system for 12 years before finally receiving debt cancellation this year. A bipartisan bill tabled in April 2021 aimed to fix the PSLF program specifically for the military.
The struggling PSLF program has yielded an extremely low success rate – single-digit for years – in part because many borrowers simply did not qualify. In 2018, Congress provided ED $ 700 million to create the Temporary Expanded Public Service Loan Forgiveness Program (TEPSLF).
As of April 30, 2021, the latest date for which federal data is available, the two programs still have anemic results: according to Federal Student Aid, the PSLF had an approval rate of 2%. Only 3,458 of the 168,702 PSLF forms completed and submitted met the loan cancellation requirements. TEPSLF achieved an approval rate of 3.4%, with only 224 out of 6,629 forms meeting government requirements.
Projections from the loan department running the PSLF program also indicated that only 22% of borrowers are on track to obtain forgiveness over the next five years, according to records obtained by the SBPC.
The settlement announced Wednesday represented “a moment of redemption and redemption for an education ministry which, under the last administration, refused to listen to the people who teach in schools, who treat in our hospitals, who fight against fires, ”Weingarten said in a press release. conference Wednesday. “It is clear that elections matter.”
Oklahoma-based choir teacher Debbie Baker – who is one of the complainants – described the announcement as “a day that I never thought would happen.”
“After teaching 18 years in a low income Title I school for the job I loved and paid on time year after year following directions… I had to go home one day and tell my husband that the money we borrowed was now twice, even though we had paid what we borrowed, ”explained Baker. “I just knew it was a mistake … [but] I realized that no one cared. “
With his loans canceled thanks to the settlement, “Honestly, it just changes your life, being able to go to school to teach every day and not have to deal with the anxiety and the anguish, the guilt. and feeling like I’m just trapped in debt that I haven’t taken on, “she said. Baker will have $ 81,336 in canceled student loans.
Peter Huk, another plaintiff and writing teacher, also spoke about how bad advice from his loan officer delayed his loan surrender.
Huk, who teaches writing at the University of California at Santa Barbara, said he was misinformed by his loan officer that he was on an eligible repayment plan for the PSLF. After paying off his loans for a decade and finding his payment plan ineligible, he was heartbroken.
“I felt a lot of frustration, I felt a little bit of anger because of the lies given to me by the loan officers,” Huk said. Due to the settlement, Huk will have $ 33,913 released.
“The Biden administration … trying to right the ship”
Addressing the PSLF program is a priority for the Biden administration.
During his candidacy hearing in April, James Kvaal, now Under Secretary for Education (the top official in charge of colleges and universities) said the administration was studying the PSLF and how to fix it.
In early October, ED announced temporary changes to the way it accounts for qualifying payments and more. Details of these changes can be found here.
Fixing the PSLF program could go a long way in helping recruit more teachers, as school districts struggle to fill positions and education jobs decline (according to jobs report), the former said. Education Secretary John B. King Jr. on Yahoo Finance Live earlier this week.
“We probably really need help from Congress to make this program as strong as possible,” King said. “There were certainly bureaucratic hurdles that were created in the design of the program that made it difficult for people to access.”
According to King, the previous administration had not considered fixing the PSLF because it was “not something they wanted to support, and it led to the rejection of many people who really should have had their plans canceled. debt… the Biden administration is trying to right the ship there. Congress can help too. ”
Implications of the rules for other PSLF candidates
The settlement reached by AFT and ED accomplishes several things.
First, he pays the balances of eight claimants who are members of AFT, which amount to nearly $ 400,000.
Second, it allows for official review of those whose PSLF application has been denied. Declined requests will be reconsidered.
This will be an automatic review, if their application was refused before November 2020, especially if the borrower had at least 10 years of repayment on a direct loan.
Borrowers will receive credit for years of payments made in the past, and will also receive detailed notices telling them how many payments are left before they are eligible for the rebate, how they can find out which payments are eligible, and who to contact for. receive advice on how to get a loan forgiveness.
In addition to this, the regulation also promises to bring more transparency to the system, with publicly available audits of the performance of student loan services, the publication of corrective action plans, the public publication of data on the reasons where borrowers do not qualify for the PSLF and improved data on time and results.
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