June 30, 2017

ABA seeks summary judgment in PSLF lawsuit

The ABA and four individual plaintiffs are seeking a summary judgment in the lawsuit they filed last year against the Department of Education after the department rescinded without explanation employees’ job eligibility determinations under the Public Service Loan Forgiveness Program (PSLF) and notified ABA employees and others who had previously been approved for participation in the program that they no longer qualified.

A Motion and Memorandum in Support of Summary Judgment, filed May 24 in the U.S. District Court for the District of Columbia, asks the court to compel the department to stop issuing retroactive denials of PSLF eligibility and restore the plaintiffs’ eligibility for the program.

The lawsuit was filed after the department began enforcing in 2015 an eligibility criterion that does not appear in the statute or regulations. As a result, the department determined that the ABA no longer met the requirements as a public service employer under the program.

The department’s response to the lawsuit in March maintained that even though borrowers had received Employment Certification Forms (ECFs) assuring them that they were on track to receive loan forgiveness under the PSLF program, the decisions issued by FedLoan Servicing, a government contractor, do “not reflect a final agency action on the borrower’s qualification for PSLF.” The contractor has issued formal determinations of eligibility under the department’s established process to those seeking such determinations since 2012.

The PSLF program was established in 2007 to forgive federal student loans for individuals who work in a wide range of public service jobs, including jobs in government and nonprofit charitable organizations. The program provides forgiveness of remaining debt after 10 years of eligible employment and 120 qualifying loan payments, and the first group of public service workers will be eligible for forgiveness this year. Those eligible for PSLF include prosecutors, public defenders and legal aid lawyers.

The department’s response and cross-motion for summary judgment are due to the court June 23.

Meanwhile, the ABA is opposing a proposal to eliminate PSLF that was included in the Trump administration’s fiscal year 2018 budget that was submitted to Congress on May 23.   

 

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