Attorney General Becerra: Education Secretary DeVos Abandons Promise to Americans Who Dedicate Their Careers Serving the Public

SACRAMENTO – California Attorney General Xavier Becerra has joined a multistate coalition in sending a letter pressing U.S. Secretary of Education Betsy DeVos and Federal Student Aid Acting Chief Operating Officer Jim Manning to address the 99 percent denial rate for Public Service Loan Forgiveness (PSLF) applications. The PSLF program was created in 2007 to help student loan borrowers who aspire to give back to their country or community by working in a public service field.

“Over ten years ago, our federal government made a promise to students: dedicate your career to public service and your direct student loan from the federal government will be cleared after ten years,” said Attorney General Becerra. “Now we find that when these hardworking professionals apply for the program, the Department denies 99 percent of applications. Breaking this promise to those who have devoted their careers serving our country is unconscionable. Hundreds of thousands of Americans relied on this promise to make life plans and career decisions. They will be left in turmoil if their loans are not forgiven. Secretary DeVos and the Federal Student Aid Program must get their act together and hold up their end of the bargain to these dedicated Americans.”

Attorney General Becerra is calling on the Department to make the following reforms to the program:

• Provide accurate and comprehensive information to borrowers about the PSLF program;
• Stop putting up roadblocks to requests for data. States, in their consumer protection role, must help the borrowers that the Department and its servicers have abandoned. The Department needs to provide states with the data necessary to diagnose and fix the problems; and
• Congress should expand the scope of the Temporary Expanded PSLF Program to include borrowers who made payments under the wrong loan program. The Temporary Expanded PSLF Program is a recent effort by Congress that provided $350 million in temporary relief for PSLF applicants who made payments on the wrong repayment plan.

In addition, Attorney General Becerra is also demanding that student loan servicers counsel borrowers about the requirements of the PSLF program and how to fulfill them. Specifically, borrowers need to know whether they have a qualifying job, whether they are in a qualifying repayment plan, and whether they are in the right type of loan program. This need was highlighted by the American Federation of Teachers’ lawsuit filed yesterday against Navient Corporation (Navient) for failing to provide adequate information to borrowers seeking to qualify for PSLF.

Attorney General Becerra has relentlessly fought for the rights of student borrowers. In June, Attorney General Becerra filed suit against Navient and its subsidiaries, Pioneer and General Revenue Corporation, for misconduct in the servicing and collection of federal student loans. Additionally, Attorney General Becerra recently announced a settlement against Aequitas Capital Management that secured more than $51 million in debt relief for Californians who attended Corinthian Colleges. He also negotiated a settlement against Balboa Student Loan Trust that secured another $67 million in debt relief. In 2017, Attorney General Becerra sued Ashford University, another for-profit school, and its parent company, Bridgepoint Education, for unlawful activity against its students; that lawsuit is pending in San Diego Superior Court. He has also denounced the Trump Administration’s decision to eliminate the Consumer Financial Protection Bureau office dedicated to protecting students.

A copy of the letter can be viewed here.