The idea that approvals can be reversed at any time, with no explanation, is chilling for borrowers.
More than 550,000 people have signed up for a federal program that promises to repay their remaining student loans after they work 10 years in a public service job.
But now, some of those workers are left to wonder if the government will hold up its end of the bargain — or leave them stuck with thousands of dollars in debt that they thought would be eliminated.
In a legal filing submitted last week, the Education Department suggested that borrowers could not rely on the program’s administrator to say accurately whether they qualify for debt forgiveness. The thousands of approval letters that have been sent by the administrator, FedLoan Servicing, are not binding and can be rescinded at any time, the agency said.
"The program’s rules are complex. Only certain types of federal loans qualify, meaning that many borrowers need to restructure their debt to make it eligible — and the Education Department has done little to clarify gray areas."- Natalia Abrams, Executive Director of Student Debt Crisis