Teachers Sue Navient Over Public Service Loan Forgiveness

By Allie Bidwell, NASFAA Senior Reporter

A group of teachers and college professors, backed by the American Federation of Teachers (AFT), on Wednesday filed a class action lawsuit against Navient, claiming the federally-contracted student loan servicer misled borrowers in an effort to prevent them from enrolling in Public Service Loan Forgiveness (PSLF).

In the lawsuit, which was filed in the U.S. District Court for the Southern District of New York, the nine plaintiffs claim Navient is actually incentivized to prevent borrowers from enrolling in PSLF in order to "retain more fees for itself," and thus encourages employees to steer borrowers away from the program.

A spokesperson for Navient said the company is not commenting on the pending litigation.

The lawsuit comes on the heels of newly-released data from the Department of Education (ED), showing that the vast majority of PSLF applications submitted to date have been denied, either for not meeting the requirements for forgiveness, or for having missing or incomplete information on their applications. Policymakers and advocates, including NASFAA, have pressed ED to provide more information on the program and conduct more comprehensive outreach to borrowers regarding PSLF. Congress also in the 2018 spending bill allocated $350 million for ED to extend eligibility to borrowers who may have enrolled in the wrong repayment plan.

Other groups have sued different loan servicers, as well as ED, for issues related to determining eligibility for and enrolling borrowers in PSLF.

One of the plaintiffs in the new lawsuit, first-grade teacher Michelle Means, alleged that when asked about loan forgiveness options for teachers, Navient did not give her information about the PSLF program, and later told her that she would be ineligible for PSLF if she did not make 120 consecutive, on-time payments, or went into forbearance or deferment. In order to qualify for PSLF, the 120 payments do not need to be consecutive, and going into forbearance is not a disqualifying factor. Means claimed that in later conversations, Navient representatives also steered her away from enrolling in income-driven repayment plans, and rather toward forbearance or other non-qualifying repayment plans, according to the lawsuit.

"Navient has purposely and systematically trapped teachers, nurses and other public service workers under a mountain of student debt instead of providing them with accurate information about their loan options and the loan forgiveness programs they qualify for and deserve," said AFT President Randi Weingarten, in a statement. "No one goes into public service to strike it rich; they do it out of a deep commitment to students, patients and the public good. But we cannot attract the best and brightest to these careers if promises of debt relief are deliberately broken."

Weingarten went on to say that Navient "deceived America's public servants and public servants-to-be," claiming the union has heard from teachers who have defaulted on their loans or can't afford to make payments on their children's loans.

The lawsuit details numerous ways in which the plaintiffs claim Navient has pushed borrowers away from PSLF, including telling them they are "on track" to receive forgiveness when they do not have Direct Loans, instructing borrowers not to submit Employment Certification Forms until they are ready to apply for forgiveness, and failing to inform borrowers of their need to recertify their income for income-driven repayment plans.

"This suit seeks not only damages but injunctive relief to protect the next generation of borrowers," Weingarten said. "We will have our members' backs as they pursue this complaint to not only achieve justice for Navient's 6.1 million federal student loan borrowers, but also uphold Congress'—and the American people's—intent when they created PSLF to help those who are helping others."

 

Publication Date: 10/4/2018


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