October 31, 2018

U.S. District Court for the District of Columbia hears arguments in ABA’s lawsuit concerning PSLF program

The ABA is awaiting a decision from the U.S. District Court for the District of Columbia following a Sept. 26 hearing on the association’s lawsuit over the Department of Education’s administration of the Public Service Loan Forgiveness (PSLF) program. 

Judge Timothy Kelly heard motions for summary judgment and a preliminary injunction in the lawsuit, which seeks to prohibit the department from continuing to adhere to its changed interpretation of the PSLF program’s governing statute and regulation, and thereby reinstating the ABA’s status as a PSLF-eligible public service organization.

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.

In 2014, however, the department began rescinding, without explanation, its prior approvals of some borrowers’ employment as eligible for forgiveness. Even though for years the department had affirmed the ABA as qualified public service employment and its employees eligible for forgiveness under PSLF, the department reversed course and started to deny requests for approval from ABA employees because it maintained that the ABA was not primarily a public service organization. When discussions with government officials did not resolve the issue, the ABA filed a lawsuit against the department in December 2016.

In its request for a preliminary injunction, the ABA highlighted mounting harm suffered by the association, which operates numerous programs with the purpose of educating the public, enhancing legal education, and/or providing direct legal services to low-income and disadvantaged populations. One program particularly affected by the department’s actions is the ABA South Texas Pro Bono Asylum Representation Project (ProBAR), which provides a wide range of free legal services to immigrants detained by the U.S government in southern Texas. Critical attorney positions at ProBAR remain unfilled, and existing lawyers have departed, because attorneys have been unwilling to take the risk that they would not be entitled to PSLF relief.

During the court hearing, the government argued that any hardships on plaintiffs were the result of contractor mistakes in preliminary certifications of annual qualification determinations for PSLF eligibility that did not amount to final agency action.

The first group of public service workers was eligible to apply for forgiveness in 2017, but only 96 out of the more than 19,000 individuals who submitted applications had received forgiveness as of the end of June 2018.

A Government Accountability Office report released Sept. 27 found that key information was not being provided by the department to PSLF loan servicers and borrowers.

The office recommended the development of a timeline for a comprehensive guidance and instruction document for the program as well as an authoritative list of qualifying employers.