California Attorney General sues Secretary DeVos and the United States Department of Education for failing to implement temporary civil service loan cancellation program

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Since the launch of the Temporary Extended Public Service Loan Forgiveness Program in 2018, the US Department of Education has turned down 94% of the applications it has received.

June 3, 2020 – SACRAMENTO – California Attorney General Xavier Becerra today announced legal action against Education Secretary Betsy DeVos and the United States Department of Education (ED) for its failure to implement the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. While many applicants for the program have met the necessary public service and loan payment conditions to be eligible for their federal student loan balances, nearly all have had their applications rejected 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).

“University graduates who put in a decade of hard work and made timely payments on their student loans got their TEPSLF loan waived. But Education Secretary Betsy DeVos chose to ignore all of this ”, said Attorney General Becerra. “Today’s trial reminds Secretary DeVos that she is not above the law. She is accountable to those college graduates who have followed the rules and deserve better, especially in the midst of an economic crisis of historic proportions. “

A bipartisan congress created the Public Service Loan Forgiveness (PSLF) program in 2007 to encourage students to access eligible public service jobs – such as teachers, paramedics, and firefighters – in return for reimbursement of the remaining balance of their federal student loans after ten years. on-time loan payments. When the first wave of borrowers requested a loan forgiveness in 2017, ED turned down applicants at the alarming rate of 99%. In 2018, a bipartite congress gave ED a second chance to keep the critical promise of the PSLF by creating the TEPSLF. In doing so, Congress gave ED clear instructions to simplify and expand the program to increase the loan cancellation rate. Additionally, Congress instructed ED to implement a “simple” application method within 60 days of the enactment of TEPSLF and ensure borrowers understand the remission requirements. It is now two years past ED’s statutory deadline and ED has continued to blatantly mismanage the program. ED not only failed to create a simple method for borrowers to apply to TEPSLF, but turned down applicants at roughly the same rate as PSLF applicants – 94%.

In the complaint, Attorney General Becerra alleges that ED’s inability to timely implement TEPSLF, including a straightforward method to request a loan forgiveness, violates the APA because it:

  • Constitutes an action unlawfully retained;
  • Constitutes unreasonably delayed agency action; and
  • Is arbitrary, capricious or otherwise not in accordance with the law.

Today’s trial continues Attorney General Becerra’s work to serve and protect student borrowers. In October 2018, and again in August 2019, Attorney General Becerra appealed to secretary DeVos and Jim Manning, acting chief operating officer of federal student aid, to address the 99% refusal rate for public service loan forgiveness applications. Additionally, in March 2020, Attorney General Becerra filed a complaint against ED for its action to repeal protections for student loan borrowers under the paid employment rule. In May 2019, Attorney General Becerra sent a letter urging ED to pay off the student loans of tens of thousands of disabled veterans in the course of their service, by developing an automatic release program. In June 2018, Attorney General Becerra filed a complaint against Navient and its subsidiaries for illegally deceiving student loan borrowers, engaging in illegal collection practices and directing borrowers to more expensive repayment options. In December 2017, the Attorney General filed a complaint against ED and Secretary DeVos for failing to grant the promised relief to tens of thousands of students swindled by the predatory for-profit chain of schools operated by Corinthian Colleges Inc. In November 2017, Attorney General Becerra for follow-up Ashford University and its parent company, Bridgepoint Education, for illegal marketing and collection activities, among other abuses; this trial is ongoing San Diego County Superior Court.

A copy of the complaint can be found here.
Source: CA. MJ

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