Attorney General Becerra: America Must Make Good on Its Promise to Public Servant Borrowers

SACRAMENTO—Attorney General Xavier Becerra, along with 20 state attorneys general, today filed an amicus brief with the U.S. District Court for the District of Columbia in support of public servants who were promised federal student loan debt forgiveness under the Public Service Loan Forgiveness (PSLF) program, but have been denied debt relief after 10 years of public service due to the U.S. Department of Education’s mismanagement. The PSLF program was created in 2007 to help student loan borrowers who aspire to give back to their country by working in a public service field. According to federal government reports and the accounts of public servant borrowers, Secretary Betsy DeVos and the Department of Education have committed pervasive errors in administering the PSLF program. As a result, fewer than one percent of all applicants are receiving their promised relief. In the brief, the attorneys general stress the importance of the PSLF program and ask the Court to closely review borrowers’ specific allegations.

“Hardworking Americans who serve the public in our schools, hospitals, libraries, law enforcement, firefighting and much more are in a financial bind because Secretary DeVos is reneging on the promise made to them,” said Attorney General Becerra. “America must make good on our promise to college graduates who have fulfilled their commitment to our country as public servants. These dedicated Americans held up their end of the bargain. Secretary DeVos and the Federal Student Aid Program now need to do the same.”

The PSLF program allows federal student loan borrowers who have paid down their loans while working 10 years in a qualifying public service job, such as teaching, firefighting, law enforcement, and military positions, to have the remainder of their federal direct student loans forgiven. This program gives public servants the chance to pass up higher, private sector salaries and still pay off their student debt. In California average student loan debt is approximately $35,000. According to Department of Education reports, more than one million Americans intend to apply for PSLF. Nearly two-thirds of these people have annual salaries of less than $50,000.

However, the Department of Education has denied relief to over 99 percent of applicants. The first PSLF borrowers became eligible for forgiveness in October 2017. Since then, 90,962 people have applied for loan discharge pursuant to PSLF, but only 845 people have received it. Federal government reports admit that the Department of Education made pervasive errors, including mistakes in record-keeping, providing inaccurate information to borrowers, steering borrowers to take actions that made them ineligible, and failing to explain why applications were denied. In this lawsuit, student borrowers claim that these types of errors led the Department to deny their PSLF applications. In the brief, the attorneys general ask the Court to thoroughly review these borrowers’ claims to determine whether they should have the opportunity to prove their case.

Attorney General Becerra has relentlessly fought for the rights of student borrowers. In August, he co-led a multistate letter to the U.S. Department of Education urging it to provide data to help states address the ongoing problems with the Public Service Loan Forgiveness (PSLF) program. In May 2019, Attorney General Becerra sent a letter urging the Department of Education to discharge the student loans of tens of thousands of disabled military veterans by developing an automatic discharge program. In June 2018, Attorney General Becerra filed suit against Navient and its subsidiaries, Pioneer and General Revenue Corporation, for misconduct in the servicing and collection of federal student loans. Additionally, Attorney General Becerra recently announced a settlement against Aequitas Capital Management that secured more than $51 million in debt relief for Californians who attended Corinthian Colleges. He also negotiated a settlement against Balboa Student Loan Trust that secured another $67 million in debt relief.

In 2017, Attorney General Becerra sued Ashford University, another for-profit school, and its parent company, Bridgepoint Education, since renamed Zovio, for unlawful activity against its students. That lawsuit is pending in the San Diego Superior Court.

Attorney General Becerra is signing on to this brief, led by North Carolina Attorney General Josh Stein, along with 19 other attorneys general, including those from Colorado, Connecticut, Delaware, Idaho, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, Oregon, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia.

A copy of the brief can be found here.