Lawsuit – Public Service Student Loan Forgiveness

Public service student loan forgiveness has faced major scrutiny since the first group of borrowers became eligible in October 2017. Many borrowers discovered that, despite being told for years they were on track, their loans or repayment programs didn’t qualify. This realization was devastating—borrowers had to start over. As a result, class action lawsuits have been filed against major student loan servicers, including Great Lakes Higher Education Corporation.

Why Borrowers Filed a Lawsuit for Public Service Student Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program, launched in 2007 under President George W. Bush, promised student loan forgiveness for qualifying federal loans. It was designed to support those working in public service or nonprofit roles by erasing remaining student debt after 10 years of qualifying payments.

However, the reality has been far more complex. Many borrowers were misinformed by their loan servicers about what types of loans and repayment plans actually qualify. This widespread misinformation has triggered public outrage and legal action.

Servicer Miscommunication and Ineligible Loans

Servicers allegedly told borrowers they only needed to:

  • Work in public service for 10 years
  • Make on-time monthly payments

But this advice left out crucial program details. For example:

  • Not all federal student loans are eligible for PSLF
  • Only William D. Ford Direct Loans qualify
  • FFEL loans (Family Federal Education Loans), which were issued by private companies but backed by the government, are not eligible unless consolidated into a Direct Loan

This confusion led borrowers to believe they were progressing toward forgiveness—when they weren’t.

The FFEL Loan Problem and Misunderstanding

FFEL loans were common before 2010. Unfortunately, these loans are not eligible for PSLF unless consolidated into Direct Loans. Many borrowers were not informed of the need to consolidate, which meant they made years of payments that didn’t count.

This oversight has led to:

  • Emotional and financial distress
  • Wasted years of repayment
  • Legal action against loan servicers like Great Lakes and Navient

Student Loan Forgiveness Lawsuits and Borrower Advocacy

Borrowers have filed lawsuits claiming that servicers:

  • Failed to inform them about loan eligibility
  • Misrepresented PSLF requirements
  • Did not help them take necessary consolidation steps

These lawsuits highlight the importance of accurate student loan guidance and transparency from servicers.

The full legal complaint against Great Lakes can be found here.

Need Help with Public Service Student Loan Forgiveness?

At Hope Credit, we specialize in helping borrowers navigate public service student loan forgiveness. Our experts:

  • Stay current on forgiveness program updates
  • Help you determine eligibility
  • Assist in consolidating loans and managing payments
  • Guide you through the application process

If you’re unsure whether you qualify or want help planning your loan repayment strategy, contact us today. We’re here to help you avoid costly mistakes and get on the right track.