UNITED STATES
The second-largest teachers’ union in the US is suing student loan servicer Navient, alleging the company deceived borrowers and prevented them from accessing debt relief.
President of the American Federation of Teachers, Randi Weingarten said the company left teachers under a mountain of student debt instead of providing them with accurate information about their loan options.
The lawsuit centres on Navient’s handling of the Public Service Loan Forgiveness Program, which allows certain not-for-profit and Government employees to have their Federal student loans cancelled after 10 years of on-time payments.
The nine plaintiffs comprise teachers, professors and other PS staff, and the lawsuit seeks to become a class action.
The union members allege that Navient, one of the largest administrators of Federal student loans, failed to inform borrowers of the Public Service Loan Forgiveness Program, misled people into believing they were on track for the forgiveness and even steered potentially eligible borrowers away from the program.
Founder of FinAid, Mark Kantrowitz said most teachers should qualify for loan forgiveness.
“However, it’s not always in the financial interest of lenders such as Navient to help borrowers into the debt relief program because they then lose the business to FedLoan, the company that administers it for the Government,” Mr Kantrowitz said.
Federal policy expert at the New America Foundation, Clare McCann said teachers were one of the groups the forgiveness program was specifically designed to help and there were likely tens of thousands of educators who should be eligible.
In a recent survey of American Federation of Teachers’ members who were struggling financially, 80 per cent of respondents said their education debt was either “challenging” or “a major burden”.
Navient did not respond to a request for comment.
Washington, DC, 5 October 2018
