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Supported by one of the largest unions in the country, nine teachers on Wednesday filed a lawsuit, accusing Navient, a student loan officer, of negligently blocking their access to a troubled student loan program. the public service, adding thousands of extra dollars to their debts.
The lawsuit, which seeks to become a class action, was brought less than a week after a government audit report exposed numerous problems with the loan waiver program. Since the education department has been accepting loan release applications for a year, it has rejected more than 99 percent. According to the audit, nearly 28,000 people sought relief, but only 96 borrowers received it.
To be eligible, borrowers must work for the government or some non-profit employers for at least 10 years, have the appropriate federal loan type (a "direct" loan) and make 120 monthly payments as a result of a type of loan. specific payment plan. Servers like Navient are supposed to guide people through all these steps.
Instead, Navient gave inaccurate information to borrowers who asked for help to join the program and discouraged them from taking the necessary steps to qualify, according to the lawsuit filed in Manhattan Federal Court.
The American Federation of Teachers pays for the trial.
Debt related to student loans now stands at $ 1.5 trillion, more than Americans pay on credit cards or auto loans. created economic spin-offs, including lower home purchase rates for people aged 20 to 30. For teachers, whose low salaries have become a political issue this year, the pressure can be particularly strong.
The Public Service Loan Cancellation Program, created by Congress in 2007, was supposed to ease the financial burden of those who chose to work in a wide range of jobs, including military service, the military and the public service. 39, law enforcement and public museums. But when the teachers' union investigated why more of its members were not using the program, it found that many were misled or blocked by Navient, said union president Randi Weingarten.
"We felt that we had an obligation to continue this, to put an end to these predatory practices and to obtain compensatory compensation," Ms. Weingarten said.
Federal loan managers are paid by the Department of Education. Only one agent, the Pennsylvania Higher Education Assistance Agency, known as FedLoan, deals with those seeking debt relief for public services. The complaint accuses Navient of diverting customers from the program to avoid losing accounts to FedLoan.
A spokeswoman for Navient declined to comment on the trial.
Michelle Means, one of the plaintiffs in the 32-year-old case, is a Maryland first-year teacher. She has an undergraduate degree, a master's degree, a teaching certification and about $ 60,000 in federal debt, she said.
In 2011, Ms. Means heard colleagues talk about the loan waiver program. When she asked Navient how to qualify, the representatives told her that she would have to make the 120 consecutive payments, she said, and that if she missed one, or if she postponed her loan to any at the moment, she would lose her eligibility.
"I was afraid it would be impossible," Ms. Means said. "Life is coming. I have asked several questions about the rules and nothing has ever been consistent from one representative to the other.
The details given by Ms. Means were incorrect. Payments do not have to be consecutive, and the deferral of a loan does not preclude a borrower's previous payments from counting for the required 120.
But Ms. Means said she was discouraged and that she had not taken the necessary steps to move to an eligible payment plan. Now she is frustrated that she has missed years of payments that could have made her renounce the cancellation of her federal loans.
Some, like the teachers, went to court. In June, a Florida federal judge dismissed Navient's motion for a similar case to be dismissed by six people who were also in a class action suit.
One of those complainants, William Cottrill, 61, a meteorologist at the National Meteorological Service, said that he had called Navient repeatedly over the last ten years to find out if he was on the to cancel his loans. Each time he was told that he was fit and that he should continue to pay his monthly payment of $ 1,100, he said.
Last year, thinking that he was almost finished, he sent a form to certify his job. He then discovered that none of his payments had occurred because he had no direct loan. If Mr. Cottrill had been informed earlier, he could have merged into an eligible loan.
Cottrill said he plans to retire next year. Instead, with $ 140,000 of remaining federal loans, he is resigned to what he called the retirement plan "out of breath": "I will retire when they will carry my body out of my desk.
Cottrill's lawyer, Gus Centrone, said he believed Navient's shares had cost borrowers billions of dollars.
"We can not allow student loan companies to brazenly lie to people and have no repercussions," Centrone said.
However, significant legal obstacles remain, including the efforts of the Department of Education to Block states and individual borrowers to sue the servers.
A lawsuit filed by Mr. Centrone on behalf of other borrowers with similar claims against another agent, Great Lakes Higher Education, was arrested last month by a federal judge in Gainesville, Florida.
Judge Mark E. Walker concluded – with "deep regret", he wrote in his decision – that the federal law prevented creditors from asserting their rights.
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