Student Loan Unforgiveness

More student loan bullshit, this current mess about the public service loan forgiveness program:

Hundreds of thousands of people with piles of federal student loan debt had not been too concerned because they were counting on a federal government program that would forgive those loans if they worked at least 10 years in a public service job.

But what happens if the definition of “public service” seemed to change midway through that decade?

On Tuesday, the American Bar Association and four lawyers who thought they qualified filed suit against the Department of Education trying to answer that question. The department had informed several of them that their jobs would make them eligible for loan forgiveness, but they later received letters saying that the ruling had changed.

All four, according to the legal brief, might have picked different jobs, borrowed less or entered different repayment plans had they known the rules would change.

The public service loan-forgiveness program began in 2007, and is available, according to the explanation on the program’s website, to employees of governmental organizations, 501(c)(3) nonprofit groups and other groups who hold “qualifying” public service jobs.

People who are not sure whether a position qualifies can fill out a certification form that the Education Department reviews. It encourages borrowers to resubmit it each year, just to make sure they still qualify.

Once employed, borrowers must work full time in a public service job or jobs and keep up their 120 monthly payments over 10 years. No loans have been forgiven yet, because 10 years have not passed since the first borrowers entered the program.

The suit, filed in United States District Court for the District of Columbia, says some borrowers received approval on their certification forms, then, years later, the entity servicing their loans reversed course, effectively ousting them from the program.

It did so retroactively, meaning that none of the previous loan payments counted toward the 120 payments needed to qualify for forgiveness. So if the borrowers took a job that qualified, they would have to start again with accumulating the payments. [my bolding]

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Kelly Leon, assistant press secretary at the Department of Education, said it was “committed to implementing the Public Service Loan Forgiveness program in accordance with the final regulations as prescribed by statute.” No one there would comment on why, once the department realized its own errors in implementation, it was punishing borrowers by making its rulings retroactive.