Since the 2018 launch of the Temporary Expanded Public Service Loan Forgiveness program, the U.S. Department of Education has denied 94 percent of the applications it has received
SACRAMENTO – California Attorney General Xavier Becerra today announced a lawsuit against Secretary of Education Betsy DeVos and the U.S. Department of Education (ED) for its failure to implement the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. While many of the program's applicants have completed the public service and loan payment requirements necessary to qualify for forgiveness of the balance on their federal student loans, nearly all of them have had their applications denied by Secretary DeVos. In the complaint, Attorney General Becerra alleges that ED’s failure to implement the TEPSLF program violates the Administrative Procedure Act (APA).
“College graduates who put in a decade of hard work and made timely payments on their student loans earned their TEPSLF loan forgiveness. But Education Secretary Betsy DeVos chose to ignore all of that,” said Attorney General Becerra. “Today's lawsuit reminds Secretary DeVos that she is not above the law. She is accountable to these college graduates who followed the rules and deserve better, especially amidst an economic crisis of historic proportions.”
A bipartisan Congress created the Public Service Loan Forgiveness (PSLF) program in 2007 to encourage students to enter qualifying public service jobs — like school teachers, EMTs, and fire fighters — in return for forgiving the remaining balance of their federal student loans after ten years of on-time loan payments. When the first wave of borrowers applied for loan forgiveness in 2017, ED denied applicants at the alarming rate of 99 percent. In 2018, a bipartisan Congress gave ED a second chance to deliver on PSLF’s critical promise by creating TEPSLF. In doing so, Congress gave ED clear instruction to simplify and expand the program in order to increase the rate of loan forgiveness. Additionally, Congress mandated that ED implement a “simple” application method within 60 days of TEPSLF’s enactment and ensure that borrowers understood forgiveness requirements. It is now two years after ED’s statutory deadline and ED has continued to grossly mismanage the program. ED has not only failed to create a simple method for borrowers to apply for TEPSLF, but has denied applicants at nearly the same rate as PSLF applicants – 94 percent.
In the complaint, Attorney General Becerra alleges that ED’s failure to timely implement TEPSLF, including a simple method to apply for loan forgiveness, violates the APA because it:
Today’s lawsuit continues Attorney General Becerra’s work to serve and protect student borrowers. In October 2018, and again in August 2019, Attorney General Becerra called on Secretary DeVos and Federal Student Aid Acting Chief Operating Officer Jim Manning to address the 99 percent denial rate for Public Service Loan Forgiveness applications. Furthermore, in March 2020, Attorney General Becerra filed a lawsuit against ED over its action to repeal student loan borrower protections under the Gainful Employment Rule. In May 2019, Attorney General Becerra sent a letter urging ED to discharge the student loans of tens of thousands of veterans who were disabled as part of their service, by developing an automatic discharge program. In June 2018, Attorney General Becerra filed a lawsuit against Navient and its subsidiaries for unlawfully misleading student loan borrowers, engaging in illegal collections practices, and steering borrowers to more costly repayment options. In December 2017, the Attorney General filed a lawsuit against ED and Secretary DeVos for failing to grant promised loan relief to tens of thousands of students defrauded by the predatory chain of for-profit schools operated by Corinthian Colleges Inc. In November 2017, Attorney General Becerra sued Ashford University, and its parent company, Bridgepoint Education, for illegal marketing and collections activity, among other abuses; that lawsuit is pending San Diego County Superior Court.
A copy of the complaint can be found here.