July 01, 2016

ABA seeks restoration as qualified employer for Public Service Loan Forgiveness Program

The ABA is seeking to restore the association as a qualified employer under the federal Public Service Loan Forgiveness (PSLF) program following action by the Department of Education (ED) rescinding the ABA’s status after years without warning or explanation.

Under PSLF, established in 2007, individuals who have made 120 payments on eligible federal student loans while employed full-time in qualified public service jobs are  eligible to have the balance of their loans forgiven. The first group of public service workers will be eligible for forgiveness in 2017.

ED regulations define public service to include government, 501(c)(3) charitable organizations and certain non-501(c)(3) organizations that provide any of a list of public services, including public interest law and public education. Employees wishing to participate in the PSLF program are encouraged by the department to periodically submit an employment certification form created by the department to determine whether they are meeting the PSLF eligibility requirements.

In a May 26 letter to Under Secretary of Education Ted Mitchell, ABA Executive Director Jack Rives emphasized that for several years employment at the ABA has been certified by the department as eligible public service for the purposes of the PSLF program. “This year, however, the department categorically has rejected employment certification applications from our employees. Adding insult to injury, applicants renewing their certifications for their same positions were notified that the rejections were being applied retroactively – instantly wiping out years of public service employment accrued under PSLF,” Rives wrote.

“These actions by the department lack any due process and are patently inconsistent with the governing law” and “have caused real harm to our workplace and our ability to attract and retain talent, as well as causing lost time and money for the borrowers directly affected,” he said.

Employees at other organizations – including the King County Bar Association in Seattle, the Immigration Lawyers Association, and the American Civil Liberties Union – also received notice that their employers were no longer certified under the program. In some cases, employees at the same organization received conflicting responses.

“Not only does the ABA explicitly qualify under the law as a public service organization, it does so in more than one way,” Rives wrote. He highlighted the ABA’s public education services through the ABA Section of Legal Education and Admissions to the Bar and the Division for Public Education, among many others, and public law services through the South Texas Pro Bono Asylum Representation Project, the ABA Military Pro Bono Project, and numerous other efforts supporting direct representation on matters involving children, the elderly, victims of domestic and sexual violence, and families recovering from natural disasters.

“In sum, serving the public is central to the ABA’s mission and is reflected in our goals. Perhaps the clearest evidence that we satisfy the definition of a ‘public service employer’ under PSLF has been the continued recognition each year by the department – until now,” Rives wrote.

The borrowers, he said, sought and in many cases obtained assurances of eligibility from the department and relied in good faith on the assurances they received through the very process the department created to provide certainty for participants in the program.

He emphasized that the ABA received no explanation about why the policy changed, how the decision to make the changes were reached, or why the changes were adopted without any public discussion or notice.

Rives requested immediate intervention by the under secretary to (1) suspend any further use of what appears to be a novel, secret evaluation of employer eligibility under PSLF; (2) take action to reverse any denial of employment certification decided solely on the basis of ABA employment; and (3) retract the rescission of prior years’ approvals.

In response to Rives’ request in late July, the department indicated that a meeting will be scheduled with the ABA. Meanwhile, the association continues to identify others affected by the policy change and is pursuing all avenues for seeking potential relief for ABA staff. Organizations that have been affected by the department’s change in PSLF policy can contact ABA Senior Legislative Counsel Ken Goldsmith at Kenneth.Goldsmith@americanbar.org.

Topic: