Nine teachers have filed a class-action lawsuit against the student-loan provider Navient, alleging that the company impeded them and other eligible public employees from participating in a federal loan-forgiveness program. The suit is financially supported by the American Federation of Teachers.
The Public Service Loan Forgiveness program erases student debt for some public-service workers, including teachers, after borrowers make 120 monthly payments over 10 or more years.
To be eligible, borrowers must be on a qualified repayment plan. The lawsuit claims that Navient, formerly Sallie Mae, recommended borrowers for non-qualifying plans and provided misleading information–including telling them that payments would count toward loan forgiveness when they would not.
Navient declined to comment on the lawsuit.
Of the 28,000 applicants who submitted by June, only 96 were approved. Most of the rejected applications didn’t meet the requirements for eligible payment schedules or qualified employers, according to a report from the U.S. Department of Education.
