The American Federation of Teachers has settled a lawsuit against the Department of Education over a loan forgiveness lawsuit filed in 2019. In the complaint, the plaintiffs sued the former Secretary of Education over failure to properly manage the student loan forgiveness program as promised. According to the president of the American Federation of Teachers, Randi Weingarten, and other members of the Federation, they struggled to get relief from their student loans due to gross mismanagement of the program. This was mainly due to incorrect information from the servicing programs, lack of oversight, and inaccurate records of payment information.
Due to the above failures, the Department of Education has agreed to a settlement with the plaintiffs. This will see the plaintiff’s loan debt of up to $400,000 discharged. The lawsuit also marks a victory for public employees, with the Department of Education agreeing to several reforms that help solve the program’s inefficiencies. The first of these will allow borrowers with direct loans that have not been successful in their forgiveness to undergo a reconsideration process. The process will be announced by the department no later than January 31, 2022.
In addition to this, the department will notify borrowers of the remaining payments before they can qualify for loan forgiveness. This will be followed by notifications of the payments that qualify for the program and those that do not. Borrowers will also be notified of the personnel they can contact to get guidance about their loan forgiveness application. These notices will be sent within 90 days of the execution of the agreement. During this period, the department will ensure that borrowers who qualify for the Public Service Loan Forgiveness are notified along with those eligible for the Temporary Expanded Public Service Loan Forgiveness.
Other highlights arising from the lawsuit include a review of denied applications, a temporary reconsideration allowing borrowers to request a review of their denied applications, and a review of processing practices by the parties responsible for the loan forgiveness program. To note is that the agreement reached in the lawsuit applies to all borrowers, with the terms also not limited by any specific period. This will allow borrowers to get relief from the once overwhelming debt payments overlooked by the Department of Education.