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Teachers Union Reaches Settlement With ED Over PSLF Denials

By Hugh T. Ferguson, NASFAA Staff Reporter 

The American Federation of Teachers (AFT) has formally come to an agreement with the Department of Education (ED) over claims that the agency arbitrarily rejected its members’ applications for the Public Service Loan Forgiveness (PSLF) program.

The 2019 lawsuit was filed by AFT President Randi Weingarten and eight borrowers who were denied debt forgiveness through the program, and was in direct response to the program’s high denial rate. The agreement, per AFT, would allow for an official review for those denied the forgiveness they believed they were owed and enable borrowers receive credit for years of past payments.

Further, the settlement discharges the full remaining loan balances of the eight individual AFT plaintiffs, eliminating close to $400,000 of student debt for public service workers who have been enrolled in the program for at least a decade.

The agreement comes on the heels of ED announcing its intent to overhaul the program through the negotiated rulemaking process, as well as more immediate actions meant to address the high denial rate of the benefit.

Additionally, the settlement provides for an automatic review of applications denied prior to November 2020 for borrowers who had made at least 10 years of repayment on a Direct Loan, as well as ensure that borrowers have access to detailed notices on how many payments remain before they qualify for forgiveness and contact information for guidance on how to obtain loan forgiveness.

“This agreement unravels the Gordian knot of PSLF’s implementation and shows the power of advocacy and collective action,” Weingarten said. “It represents a game-changing victory for the millions of educators, nurses, public employees and other AFT members yoked to crushing monthly repayments that have upended their lives. And it gives muscle and teeth to the Education Department’s reforms to PSLF announced last week.”

 

Publication Date: 10/14/2021


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