Betsy DeVos.
Summary: The Department of Education said that it may not forgive student loans as promised after all.
For law school graduates, there are several employment choices to consider–one being whether to pursue lucrative private work or attempt to do good in the low-paying public sector. Saddled with student loan debt, the answer would seem obvious what choice to make, and the government knowing this created a student loan forgiveness program for those who worked in the public for at least ten years.
This student loan forgiveness program was one incentive to get talented people to choose jobs such as public defender, police officer, or teacher; but now Betsy DeVos and the Trump administration is considering demolishing it. Under the program, anyone who chose to work in the public sector could have their student loan debt wiped away after working in the public sector for ten years. One condition was that the worker had to make payments throughout the decade.
But this week, the Department of Education indicated that the program may cease. As part of a legal battle between four student loan borrowers, the American Bar Association, and the Public Service Loan Forgiveness Program (PSLF), the DOE submitted a brief that there is no guarantee that those who participated in PSLF will actually have their loans forgiven.
The lawsuit in question concerns a group of lawyers who chose to work in the non-profit world, thinking that their jobs qualified for PSLF. According to GQ, they were told in 2016 that their positions did not qualify because the companies were not certified 503(c) non-profits, and being lawyers, they sued.
On Wednesday, the Department of Education argued that there were no guarantees that anyone’s loans would be forgiven after 10 years of payment. The DOE did not say that no one would be paid back, but their statement was ambiguous enough to scare the thousands of people who chose public work, thinking they would benefit long-term.
Chong Park of Ropes & Gray told MarketWatch that the Department of Education’s attitude towards was borrowers was “cavalier.”
“The Department itself created a program, the plaintiffs relied on it,” Chong said. “They followed the process. Years later, the Department just pulled the rug out from underneath them.”
One of the plaintiffs in the case, attorney Jamie Rudert, told MarketWatch that he had chosen to work in the public sector because of the program. He said that he had $124,808 in law school student loans, but he had determined he could follow his passion of working in the public because of the loan forgiveness program.
After law school, Rudert worked at the Vietnam Veterans of America, and he said he had submitted an ECF [Employment Certification Forms] as part of the program and that the ECF had been approved twice. On his third year, he submitted an ECF and was told that his three years of payment didn’t count.
“It just adds to this level of uncertainty I have as to whether I made the right decision to go into public service to begin with and to rely on it,” Rudert said.
Natalia Abrams, the executive director of Student Debt Crisis, admonished the DOE and said that its attitude towards the program could discourage people from working in public service.
“You’re asking borrowers to enter into a 10-year program without any guarantees,” Abrams said.
ABA President Linda Klein said in a statement that they were disappointed in the DOE’s filing.
“It is outrageous that the department refuses to acknowledge its mistakes,” Klein said. “Thousands of young people—teachers, engineers, lawyers, doctors and more—made major life decisions based on inaccurate information provided by the department and its contractor. They took jobs and moved their lives based on this information. The plaintiffs followed the rules and are now paying a steep price for the department’s mistakes.”
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