26 September 2023

UNITED STATES: State sues ‘unforgiving’ Secretary

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The State of California is suing Secretary of the United States Department of Education, Betsy DeVos over the failures of the Department’s Public Service Loan Forgiveness (PSLF) Program.

California Attorney General, Xavier Becerra (pictured) said the Department was “flouting Congress’s clear and repeated instructions to provide student loan debt relief to Public Servants”.

Mr Becerra said the Department had made loan forgiveness “virtually inaccessible” through a “convoluted application process” for borrowers.

“College graduates who put in a decade of hard work and made timely payments on their student loans have earned their loan forgiveness — but Education Secretary, Betsy DeVos chose to ignore all of that,” Mr Becerra said.

He said Ms DeVos was not above the law and was accountable to graduates who had followed the rules and deserved better, “especially amidst an economic crisis of historic proportions”.

Press Secretary at the Department of Education, Angela Morabito said the loan forgiveness program was problematic because it was poorly designed by Congress in the first place.

“This is yet another political stunt by an activist State Attorney General hoping to curry favour with left-wing activists,” Ms Morabito said in a statement.

“We have said it before, and we’ll say it again: The PSLF program needs a permanent fix,” she said.

“When the PSLF program was written more than a decade ago, the Department made Congress aware that only a small fraction of borrowers would qualify because of the way they wrote the law.”

Ms Morabito said the Department had to implement laws as they were written by Congress.”

The PSLF program was created in 2007 by Congress to encourage students to enter Public Service jobs, such as teaching, fire-fighting, law enforcement, public defenders, family and child services employees, and some medical areas.

The promise made for undertaking such jobs was that after the graduates had made 120 on-time loan payments (or 10 years’ worth), they’d have the remaining balance forgiven.

In 2017, when the first wave of applicants applied for the forgiveness, 99 per cent were denied.

Later attempts to fix the scheme still resulted in a 94 per cent rejection rate.

Sacramento, 4 June 2020

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