NTEU Wins PLUS Loan Settlement Agreement


4/3/07: I am pleased to report that on Friday, March 30, NTEU and the SEC finalized a settlement agreement to reimburse agency employees who applied for federal PLUS loans (Parent Loans for Undergraduate Students) in 2005. PLUS loans allow parents to borrow up to the total cost of college for their child. The resulting settlement will result in employees being reimbursed hundreds of thousands of dollars.

The settlement was negotiated following National Arbitrator Joseph M. Sharnoff’s January 25, 2007 ruling that sustained NTEU’s grievance alleging that the SEC violated Article 25 of the Collective Bargaining Agreement (CBA) by denying PLUS loan reimbursements to the agency’s eligible employees in 2005. (Click HERE to read the original report on this important decision.) After ruling in NTEU’s favor, Arbitrator Sharnoff gave the parties several weeks to attempt to agree on a remedy in this case.

As part of the settlement, the SEC also agreed to pay all of the employees who were more recently denied PLUS loan reimbursements in December 2006 -- even though NTEU had not yet arbitrated the grievance that it recently filed on behalf of those employees.

Under the settlement agreement, PLUS loan reimbursements will be made to all agency employees, or to their applicable lending institutions, that submitted a request for PLUS loan reimbursement during 2005 and/or 2006. The agreement only applies to PLUS loan applicants during 2005-06 who are still employed by the SEC.

According to the settlement, reimbursement totals are determined based on a formula calculating the total amount of the PLUS loan, the total remaining loan balance and all payments that were made by employees since the SEC denied their reimbursement applications. Total reimbursement for those who submitted requests for only one year cannot exceed $10,000, less applicable taxes. Total reimbursement for those who submitted requests for both years cannot exceed $20,000, less applicable taxes.

To expedite reimbursement, the agency is requesting applicants to provide all necessary loan balance and repayment information within 45 days to make reimbursement calculations.

Although an agreement has been reached, this fight will not be over until the agency fully complies with the settlement agreement and repays all applicable PLUS loan debt from the years in dispute. NTEU will keep you informed about any further developments in this matter.

If you have any questions or comments regarding this settlement, please contact your chapter representatives.

Gregory Gilman
NTEU Chapter 293 President