Imagine working in public service for many years and being just months away from having a pile of debt canceled through the federal Public Service Loan Forgiveness program.
Then, a federal action stops your progress in its tracks. A workaround requires an application. But the Education Department sits on your application for nearly two years.
According to a lawsuit that the American Federation of Teachers and its president, Randi Weingarten, filed Friday naming Education Secretary Linda McMahon, that’s what happened to Alexander Watts, a nurse at Ohio State University’s medical center. Tens of thousands of public servants have experienced a variety of similar delays, according to the legal filing.
The P.S.L.F. program is open to government and nonprofit employees like schoolteachers, public defenders and librarians. It is supposed to cancel all remaining federal student loan debt after these workers make 120 payments in an income-driven repayment plan and have at least 10 years of service in eligible jobs. Many have succeeded.
But many more have been caught in a quagmire, as the Biden administration tried to loosen certain rules, and then courts and the Trump administration reversed some changes and made their own alterations.
The Biden administration reviewed years of bureaucratic mistakes and regulatory sludge — a mess that both Democrat and Republican secretaries in the Education Department have presided over — and offered some borrowers the opportunity to buy back months of eligibility to help them get to 120 payments.
That required a application. Many borrowers filled it out.
But according to the suit, the Education Department is reviewing the applications slowly while they pile up quickly, and the wait has dragged on to nearly two years and counting. In some instances, borrowers cannot even see an up-to-date count of how close they are to meeting the required 120 payments — or the number is visible but falls without explanation, say from 116 eligible payments to 109.
Without debt cancellation, borrowers cannot move on and redirect payments to down payments for homes, college savings for their own children or other productive uses.
“Instead of processing applications in good faith, McMahon has left 90,000 dedicated public employees in the lurch, forcing them further into debt while their applications just sit there,” Ms. Weingarten said in a statement.
The Education Department said that the review of buyback applications was a manual process that required extensive paperwork and that it was moving the task over to student loan servicers.
“Rather than acknowledge these realities, the union has yet again chosen litigation and election-year theatrics,” Ellen Keast, a department spokeswoman, said.
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