It is notoriously difficult to receive funds from the PSLF program. For example, in April 2021, only 3.4% of applicants were approved for loan forgiveness through the PSLF. That’s up from an approval rate of 1.4% in December of 2019.
The American Federation of Teachers union, along with a small group of teachers, sued Navient Solutions, LLC in federal district court in New York.
The suit alleged that the student loan servicer told borrowers to apply for repayment plans and forbearance instead of loan forgiveness programs.
As a part of student loan servicing, Navient is supposed to guide people through the many requirements of applying for the PSLF program. According to the teachers, Navient failed to do that.
Instead, Navient’s representatives gave them insufficient information about loan forgiveness, failing to tell them everything they needed to know to navigate the complex qualification process. It also discouraged them from taking steps to qualify for the program.
Essentially, Navient did everything it could to keep borrowers from understanding how to reduce what they owed their lenders, usually the U.S. Department of Education.
In addition, student loan borrowers, the state attorneys general of California, Illinois, Mississippi, New Jersey, Pennsylvania, and Washington, and the Consumer Financial Protection Bureau (CFPB) filed lawsuits alleging that Navient:
Violated consumer protection laws and used deceptive practices to keep borrowers in payment plans that would make Navient more money
Misdirected borrowers and did not help them find the best repayment options for their loans, including income-driven repayment plans and loan forgiveness programs
Misapplied payments made by borrowers
Did not provide clear directions for releasing co-signers from student loans or re-enrolling in income-driven repayment plans
These legal actions were taken separately from the teachers’ lawsuit, and many are still in process.