Back in 2018 nine teachers filed a lawsuit against Navient, one of the government’s student loan servicers for misleading borrowers or blocking them from accessing a public service loan forgiveness program. According to the New York Times, out of the 146,000 applicants to the program at the time, only 3,200 saw their student loans forgiven. The lawsuit was backed by the American Federation of Teachers, one of the nation’s largest unions. The lawsuit finally reached a proposed settlement in Manhattan federal court.
The settlement would award $15,000 to the plaintiffs and pay $1.75M to fund a new educational program that would provide public service workers counselling on their debt. It would also increase training of Navient workers to properly guide borrowers. Judge Denise Cote dismissed most of the other teacher’s claims of wrongdoing in July due to lacking or flimsy evidence.
The Department of Education has already been allocated $2.3M by Congress to increase outreach for the public service loan forgiveness program last year. Democratic Senators Tim Kaine, Sheldon Whitehouse, Tammy Duckworth, and Maggie Hassan already sent a letter to DeVos inquiring into this funding, as well as 23 senators demanding an investigation into other government loan servicers. Of these senators were three previous democratic presidential nominees Bernie Sanders, Elizabeth Warren, and Amy Klobachur. This settlement does not actually forgive any of the student loans that public service workers applied for, nor does it provide the same amount to pay off the average student loan debt, which as of 2019 was $31,172. Therefore anyone with debt held by Navient should not be expecting loan forgiveness from the settlement.