Education Secretary Betsy DeVos may cancel a program that allows student loans to be forgiven after working 10 years in a public service job.
According to a new report in the New York Times, the Department of Education (DOE) is hinting at eliminating the program in a recent legal filing. The letter stated, among other things, that the administrator of FedLoan Servicing — who normally signs off on approval of student loan forgiveness for borrowers who have met the 10-year agreement — doesn’t have binding authority to forgive federal loans, and that the Department of Education can renege on their end of the agreement on a whim.
If the DOE does indeed go back on its word to erase debt for students who have abided by that agreement, it could affect approximately 550,000 people currently signed up for the program, according to the Times. The program’s rules stipulate that if a borrower agrees to work for at least a decade in the government or nonprofit sector, their loans will be forgiven. This typically dissuades indebted students from pursuing careers in the private sector that typically pay more, in exchange for tens of thousands of dollars in accumulated debt to be forgiven down the road.
This is a particularly stunning blow to the first students who are scheduled to have their loans forgiven, as the program turns ten years old this year. In September of 2007, then-President George W. Bush signed the bill into law after it passed both houses of Congress with bipartisan support. And although the rule hasn’t been officially repealed yet, the DOE is already starting to break its promises to borrowers.
After receiving letters from the DOE stating that their loans would not be forgiven despite working for ten years in public service as promised, four borrowers are teaming up with the American Bar Association to sue DeVos’ agency. The Times reported that the plaintiffs were told the jobs they took were “qualifying” jobs that would allow them to escape their debt if they worked in those jobs for a decade.
However, one of the plaintiffs, who is an attorney, recently received a letter from the Department of Education saying that she wouldn’t qualify for loan forgiveness, with no additional explanation other than that she didn’t qualify due to her job not explicitly educating students and families.
“They had to have seen this coming, that the statute wasn’t straightforward and people would need some sort of guidance,” Kate Voigt — whose debt obligation amounts to roughly $240,000 — told the Times. “The fact that they haven’t provided any is shocking to me.”
Jamie Rudert is also suing the DOE, after being initially told in 2012 that he qualified for the program due to his work for the nonprofit Vietnam Veterans of America. But in 2016, Rudert received a letter from the DOE stating that his application had been approved in error. He was not given any means to appeal the decision to deny the rejection. Rudert owes approximately $135,000 in student loans he took on to complete law school.
“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,” Rudert said.
As of this writing, the program’s future remains unknown, and Secretary DeVos — who has ties to a student debt collection agency — has not spoken out publicly about whether or not she would end the program.
Tom Cahill is a senior editor for the Resistance Report based in the Pacific Northwest. He specializes in coverage of political, economic, and environmental news. You can contact him via email at [email protected], or follow him on Facebook by clicking here.