September/October 2019 Issue
August 25, 2019

Union lawsuit takes on student debt crisis

Author: Sylvia Saunders
Source: NYSUT United
student debt
Caption: UFT art teacher Kelly Finlaw is one of eight public and nonprofit employees to join a AFT lawsuit charging Education Secretary Betsy DeVos and the Department of Education with gross mismanagement and out-and-out sabotage of federal student debt relief programs. Photo by Jonathan Fickes.

When art teacher Kelly Finlaw first heard about the Public Service Loan Forgiveness program, she thought it would be a life raft for her.

After more than a decade of teaching in New York City, Finlaw was drowning in more than $100,000 in debt — struggling to pay her rent, plus $600 in monthly student loan payments.

“I live a very frugal life, but I felt like I’d spend the rest of my life paying off these loans,” Finlaw said. She was barely keeping her head above water.

So when her federal student loan servicer, Nelnet, notified her that she would qualify for loan forgiveness, Finlaw eagerly called to learn more.

A Nelnet rep told her that if she made 10 years of on-time payments, she was “on track” for the rest of her federal loan debt to disappear.

The IS 528 teacher is exactly the kind of dedicated public servant lawmakers had in mind when they approved the bipartisan PSLF law with much fanfare in 2007. The first in her family to graduate from college, Finlaw took out federal and direct loans to pay for both her undergraduate and graduate degrees in art education.

A beloved teacher in a high-needs middle school, Finlaw’s the kind of teacher who is constantly fundraising and foraging for art supplies, who takes her students on field trips to visit colleges, and who makes sentimental end-of-year videos as a graduation send-off for her eighth graders.

As she enters her 14th year of teaching this fall, Finlaw loves her job and her students — and hopes to someday be able to buy an apartment in the school’s Washington Heights neighborhood.

After she made her 120th on-time loan payment in November 2017, Finlaw thought it would be a time for great celebration. Instead, she was shocked to learn her application was denied and her nightmare would only get worse.

In a series of frustrating phone calls, a Nelnet representative told Finlaw the company had received many similar calls from borrowers who believed they qualified for PSLF, only to be denied. The Nelnet rep referenced news articles about PSLF’s low acceptance rate and told Finlaw that PSLF is a faulty program and a “scam.”

To make matters worse, the rep incorrectly advised Finlaw that the only way for her to qualify for loan forgiveness was to consolidate all of her loans and start over again. She listened, but now has $88,000 of debt and feels “back at the bottom again.

“I was misled, lied to and given false information over and over again,” Finlaw said. “I can’t tell you how many times I sat on my stoop on my lunch break and just went round and round. Then I’d call back again and get a different answer! I felt so alone and powerless.”

But one Friday afternoon Finlaw got an email from her local union, the United Federation of Teachers, urging members who applied for PSLF to take an online survey for the American Federation of Teachers.

A couple days later she got a follow-up email, then a phone call in July from an attorney asking if she wanted to join an AFT class action lawsuit.

“My first reaction was ‘Hell, no,’ because I don’t like to be in the limelight,” Finlaw said. But the more she thought about it, she was willing to do anything she could to force the Department of Education to fix the program and implement the law the way it was intended.

Finlaw is one of eight public and nonprofit employees to join the AFT lawsuit charging Education Secretary Betsy DeVos and the Department of Education with gross mismanagement and out-and-out sabotage.

student debt lawsuit team
United Federation of Teachers member Kelly Finlaw and Missouri educator Gloria Nolan are plaintiffs in a class-action lawsuit against Betsy DeVos and the U.S. Department of Education over their mishandling of the Public Service Loan Forgiveness program. From left, attorney Yelena Konanova, Nolan, attorney Margaret Siller, Finlaw and AFT President Randi Weingarten. Photo provided.

“Public Service Loan Forgiveness is a right, but Betsy DeVos has turned it into a crapshoot,” AFT President Randi Weingarten said. “Instead of helping the millions of Americans owed debt relief under the program, DeVos has hurt and pauperized them. She has ignored the companies’ deplorable behavior, despite the fact they are under contract with and overseen by her department.”

DeVos has not only failed to properly administer the program, she has pushed for PSLF to be eliminated entirely, Weingarten noted. With a trillion-dollar national debt crisis, Congress continues to support the much-needed program, with many lawmakers proposing expansion.

In addition to the case against DeVos and the Education Department, the AFT is also going after the loan companies themselves: Last year the AFT filed a separate class action lawsuit against Navient, another large federal student loan servicer, on behalf of nine teachers who alleged that the servicer gave borrowers “inaccurate and misleading information” for financial gain. A federal court ruling over the summer allows the lawsuit to move forward under New York State consumer protection law.

As the legal action continues, Finlaw is just thankful to have the power of the union behind her.

“I felt like I was so alone and powerless — but all of a sudden I have an army behind me,” Finlaw said.

“Without the union, I’d still be on my stoop desperately trying to figure out how to lower my payments and stay afloat.”

But this lawsuit isn’t just about getting justice for Finlaw and the other plaintiffs. “It’s about making the loan forgiveness program live up to its promise,” she said.

Denied PSLF? Try again.

As of March 2019, the U.S. Department of Education has forgiven the loans of fewer than 1 percent of borrowers who applied for the federal Public Service Loan Forgiveness program.

After so many borrowers were denied access to the program, Congress last year approved a temporary expansion of the program to allow more borrowers to qualify.

The $350 million is available on a first-come, first-served basis. To qualify, your application must have already been denied because some or all of the payments were made under the wrong type of repayment plan. Borrowers who believe they may qualify for Temporary Expanded Public Service Loan Forgiveness (TEPSLF) should email a request to TEPSLF@ myfedloan.org and ask that the Education Department reconsider your eligibility.

For more information, go to studentaid.ed.gov or contact FedLoan Servicing at 1-855- 265-4038 from 8 a.m.–9 p.m., Monday through Friday.

Help is available

NYSUT is committed to helping members who are struggling with student debt.

After training from American Federation of Teachers, NYSUT staffers are conducting student debt clinics in regional offices around the state.

Working in partnership with Cambridge Credit Counseling, a 501(c)(3) not-for-profit agency, NYSUT Member Benefits is also sponsoring regional events and sending Cambridge Credit representatives to conferences and some local union meetings.

NYSUT members are eligible for a free, no-obligation, debt and student loan consultation with one of Cambridge’s certified counselors.

There is no charge to call and speak with a counselor, who can review members’ loans and help determine the best repayment options.

The company has a dedicated telephone line (888-254-9827) for NYSUT members to get counseling for student loans, or for any other debt management issues. To date, more than 1,000 NYSUT members have contacted Cambridge for help.

Cambridge also offers a web portal available at a reduced rate of $14.95 that can help explain the various options when paying down student debt, including student loan forgiveness programs, income-based repayment options and more. A report will be provided based on loan information and responses to questions.

For more information, go to memberbenefits.nysut.org/cambridge.

The AFT recently rolled out a new online debt relief tool called “Summer.” It’s an interface similar to Turbo-Tax that can help ease student debt payments.

Go to meetsummer.org/aft for more. In addition, AFT’s Forgivemystudentdebt.org website provides public service workers information about the federal PSLF program.

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