City teach­ers sue loan ser­vicer

In­struc­tors say firm mis­led them about loan for­give­ness

Baltimore Sun - - NEWS - By Liz Bowie liz.bowie@balt­ twit­ lizbowie

Bal­ti­more City school­teacher Michelle Means had been chip­ping away at her $60,000 in fed­eral stu­dent debt and knew about a loan-for­give­ness pro­gram Congress started in 2007 to help pub­lic ser­vants.

Yet, each time she talked to rep­re­sen­ta­tives at Navient, a for-profit com­pany that ser­vices loans for the U.S. De­part­ment of Ed­u­ca­tion, she came away be­liev­ing that she wouldn’t qual­ify for the pro­gram. Means, 32, said Navient ad­vised her that she had to make 120 con­sec­u­tive pay­ments, with­out miss­ing one or putting her loan in for­bear­ance for even a month, be­fore she would be el­i­gi­ble.

It turns out that was in­cor­rect, she said. Ear­lier this month Means and eight other teach­ers sued Navient, say­ing the com­pany steered bor­row­ers like Means away from loans that would qual­ify them for the for­give­ness pro­gram, while giv­ing them false as­sur­ances they were on track for loan for­give­ness and mis­stat­ing the terms un­der which they would qual­ify.

Had she known that the 120 pay­ments didn’t have to be con­sec­u­tive, she said, “I would be very close to hav­ing my fed­eral loans be­ing for­given.” The Amer­i­can Fed­er­a­tion of Teach­ers, one of the largest teach­ers unions in the coun­try, is pay­ing the le­gal fees associated with the law­suit for their mem­bers.

Navient, based in Wilm­ing­ton, works un­der a con­tract with the U.S. De­part­ment of Ed­u­ca­tion to ser­vice over $205.9 bil­lion in fed­eral stu­dent loans, owed by ap­prox­i­mately 6.1 mil­lion peo­ple, ac­cord­ing to the law­suit. Navient de­clined to com­ment for this ar­ti­cle.

A first-grade teacher in a West Bal­ti­more el­e­men­tary school, Means has un­der­grad­u­ate and master’s de­grees. Even though she com­mutes from South­ern Mary­land each day, she said she stays at the school be­cause she has built strong re­la­tion­ships with fam­i­lies and stu­dents. “I have had op­por­tu­ni­ties to go else­where. I feel I am val­ued here,” she said.

Congress passed a loan for­give­ness pro­gram for pub­lic ser­vants that al­lowed cer­tain gov­ern­ment em­ploy­ees such as teach­ers, po­lice of­fi­cers and those in the mil­i­tary to have their stu­dent loans for­given if they worked in those jobs for 10 years and sat­is­fied other cri­te­ria. The suit al­leges that Navient took ad­van­tage of the com­plex­ity of the pro­gram to dis­cour­age bor­row­ers from fill­ing out the pa­per­work and en­cour­aged them into for­bear­ance pro­grams where their in­ter­est pay­ments con­tin­ued to ac­crue.

The first co­hort of bor­row­ers to have made 120 pay­ments are now el­i­gi­ble for the loan for­give­ness, but few are find­ing them­selves ac­cepted. A re­cent U.S. De­part­ment of Ed­u­ca­tion re­port showed that only 96 of 28,000 bor­row­ers who ap­plied were green-lighted.

Lawyers for the teach­ers say that Navient rep­re­sen­ta­tives are told to spend un­der seven min­utes on each phone call with a bor­rower, which puts pres­sure on them to deal with a ques­tion quickly rather than thor­oughly. In ad­di­tion, the com­pany doesn’t have a fi­nan­cial in­cen­tive to help peo­ple into the pro­gram, the suit said.

Ac­cord­ing to Lena Ko­nanova, an at­tor­ney for the firm of Se­lendy & Gay PLLC, the suit poses the ques­tion of how much Navient has ben­e­fited on the backs of pub­lic ser­vice em­ploy­ees.

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