Student-Loan Forgiveness Suit Advances, With Union Shut Out

American Federation of Teachers President Randi Weingarten addresses a news conference in New York on March 15. Michael Mulgrew, president of the United Federation of Teachers, is also pictured. (AP Photo/Richard Drew)

WASHINGTON (CN) — While otherwise booting the second-largest teacher’s union in America from the case, a federal judge on Monday advanced allegations that the government has grossly mishandled loan-forgiveness programs meant to incentivize careers in public service.

With its roughly 1.5 million members, the American Federation of Teachers, AFL-CIO, had alleged that the Education Department under Secretary Betsy DeVos failed to minimize the risk of erroneously denied applications to the Public Service Loan Forgiveness Program and the Temporary Expanded Public Service Loan Forgiveness Program.

Both were set up in 2007 to draw recruits to relatively low-paying public service careers, such as teaching, nursing and firefighting. As of March 2019 however, the U.S. government had forgiven just 1% of eligible loans.

“ED has failed to make good on Congress’s promise,” the union claimed in the 111-page complaint it brought last year in Washington with its president Randi Weingarten and six individual plaintiffs.

U.S. District Judge Dabney Friedrich agreed Monday to toss Weingarten and the union from the case, saying they failed to establish standing.

“To satisfy the injury-in-fact requirement of Article III standing, an organization ‘must allege more than a frustration of its purpose,’” the Trump-appointed judge wrote.

Weingarten focused in a statement meanwhile on the court’s refusal to dismiss two counts against DeVos.

“Instead of shirking responsibility, the secretary now has to answer to the students she’s blamed and dismissed, while denying them the debt relief they’re entitled to under the law,” the union president said in a statement. 

Selendy Gay attorney Jessica Underwood likewise voiced gratitude that Friedrich advanced her individual clients’ due-process and administrative-law claims. 

“This decision brings us one step closer to holding Secretary DeVos accountable for her failures to administer the Public Service Loan Forgiveness program and securing the relief public servants deserve,” Underwood said in an email Monday afternoon. 

The complaint against DeVos notes that borrowers submitted 86,006 applications to the two loan forgiveness programs, but a mere 864 applications were approved as of last year.

Accusing DeVos of failing to take into account servicer misconduct, the union argued the secretary could act on her authority to wipe out the debt. 

The Justice Department failed to sway Friedrich that the court could not provide useful relief, namely ordering DeVos to vacate the loan-forgiveness decisions. “This argument is unavailing,” Friedrich wrote.

Later the judge emphasized that DeVos “has not declined to use this authority ‘based solely on the belief that [she] lacks jurisdiction.’”

“And the department has not ‘consciously and expressly adopted a general policy that is so extreme as to amount to an abdication of its statutory responsibilities,’” the ruling continues.

Representatives for the departments of Justice and Education did not return requests for comment, nor did the National Student Legal Defense Network.

Arguing that DeVos and her department are eager to avoid loan forgiveness, Weingarten said the American Federation of Teachers plans to stand by its members as the case proceeds.

“This isn’t only about the technical errors-Judge Friedrich is saying Betsy DeVos must answer AFT members’ allegations that she flagrantly ignored the hurt and harm perpetuated on millions of teachers, first responders and public servants across the nation,” she said. 

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