Student Loan Forgiveness For Public Servants Up In The Air

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Whiplash for would-be University of California, Irvine students

Facing overcrowding, UC Irvine withdrew the the acceptances of nearly 500 students last week, just two months before the start of the fall quarter.  That was after about 800 more students than expected accepted UC Irvine's offer of admission this spring. 

There was an outcry.  Most of the admissions offers were canceled based on technicalities.  And it was too late for many to attend other four-year colleges.  This, at an institution known for offering opportunity to students from diverse backgrounds.  This week, Irvine announced that it had made a mistake, and reinstated 290 of the offers.  The remainder, who had plunging senior-year grades and other issues, can appeal on a case-by-case basis. 

New fears about the Public Service Loan Forgiveness program

Nearly half a million teachers, social workers, police officers and other public servants who are enrolled in a federal student loan forgiveness program got ominous news last week in a legal filing by the Department of Education. 

The department is being sued by some enrollees in the program, called Public Service Loan Forgiveness.  The latest motion in that case asserts that there has been no final decision on whether anyone will have their student debt erased under the program.  The department may have accepted their paperwork, the filing states, but those are only "interim, non-binding" decisions.  Only after 10 full years of payments will the department decide whether people should be accepted into the program and have their loans forgiven. 

The president of the American Bar Association, which is a plaintiff in the current suit, called the argument "outrageous" and "unfair." 

A hearing in the case is set for Oct. 6. 

Justice Department may take on university affirmative action

Colleges may face federal investigations and lawsuits for favoring historically underrepresented racial and ethnic groups in their admissions policies, The New York Times reported.  An announcement circulated internally by the Department of Justice's civil rights division was obtained by the newspaper. 

Sarah Isgur Flores, a spokeswoman for the DOJ, said that the report was inaccurate and that the memo referred to a specific complaint alleging that Harvard University discriminates against Asian-Americans. 

Attorney General Jeff Sessions has been on the record as saying that race-based affirmative action in some cases has "delayed" the "movement to racial harmony." 

The report comes amid policy moves at the Department of Education that have raised concerns among civil rights groups, such as around Title IX and LGBT rights enforcement.  While she was an undergraduate at Stanford University, Candice Jackson, the head of the Office of Civil Rights in the Department of Education, wrote an op-ed calling affirmative action "discrimination" against whites such as herself.  The Department of Education has not made a public statement about the issues raised in the Times report. 

The Supreme Court most recently ruled on affirmative action admissions policies last summer, against a white woman who claimed discrimination.  The court upheld the "race conscious" admissions policies at the University of Texas on the grounds that diversity may be "central" to the "identity and educational mission" of a university. 

No single student-loan servicer

Competition will reign among the private companies that manage student loan payments, Education Secretary Betsy DeVos announced Tuesday.  Previous statements had suggested that the secretary wanted to shift to a single servicer.  Consumer advocates urged her to reconsider and maintain competition among servicers, and a bipartisan group of senators had introduced legislation last week to stop her. 

The department will also launch a centralized platform for student loan data processing and customer service, canceling plans to outsource some servicing functions. 

But this isn't necessarily the end to servicer headaches among 44 million borrowers, who today owe over $1.4 trillion.  The servicer industry is quite concentrated, with Navient, a spinoff from the former student lender Sallie Mae, managing $300 billion of the total. 

Navient also has the highest ratio of consumer complaints among servicers: 75.38 per 100,000 student loan borrowers.  The next closest is the Pennsylvania Higher Education Assistance Agency, far behind with 9.95 complaints per 100,000 student loan borrowers.  That analysis of federal data comes from the independent publication Student Loan Report. 

Thumbs-up for Delaware's education plan

Delaware's official nickname is "The First State."  Sure enough, they were the first of 16 states and the District of Columbia to submit an education plan to DeVos under the federal Every Student Succeeds Act.  And now, Delaware's plan is the first to be approved.  This came after the state responded to feedback from the Education Department that some called unduly harsh and overbearing. 

The remainder of the states must submit their plans next month.