UNITED STATES
The United States Consumer Financial Protection Agency (CFPB) is being sued by a not-for-profit student loan group for abandoning its duty to police “widespread mismanagement of the Public Service Loans Forgiveness program”.
Founder of Student Debt Crisis, Natalia Abrams (pictured) said the lawsuit was also being brought against the Department of Education “because they are not doing their jobs”.
She said the breakdown in Government supervision had created such a mess that her organisation was being overrun with calls from people who needed help.
The lawsuit essentially says it’s not okay that Ms Abrams’ group has been forced to divert resources to handle a problem the Government should be dealing with.
The Government program promises firefighters, public defenders, teachers, people who work at non-profits and others that if they make payments for 10 years, the remainder of their Federal student loans will be forgiven.
Congress created the program in 2007 to encourage people to work in Public Service jobs that were often lower-paying than other careers.
Ms Abrams said while that was a noble goal, the program had been badly mismanaged.
She said the Department of Education’s own accounting showed that 99 per cent of people who had applied for loan forgiveness had been rejected.
She gave the example of Jeremy, who now works as a police officer in Michigan.
“My decision to be a Public Servant and join the military was 100 per cent based on that Government promise,” Jeremy, who did not want to use his last name because of his police work, said.
Jeremy and his wife, Chelsea, said they made payments for more than eight years, but none counted because they got bad advice from call centre workers at loan servicing companies. So, their combined $119,000 in student debt was not being forgiven.
He said their student debt now has Chelsea regretting she ever became a teacher because she makes too little money to pay it off.
“She tells me that she should have done something else – and she loves her job. It’s hard not to feel betrayed,” Jeremy said.
Washington, 27 November 2019
