Judge rules for borrowers in ABA loan forgiveness lawsuit

U.S. District Judge Timothy J. Kelly in Washington, D.C., said changes to the eligibility requirements, made several years after the program began in 2007, were “arbitrary and capricious.” Kelly called one of the Education Department’s main legal arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument.

Kelly ruled in favor of three individual plaintiffs who worked several years in public service jobs and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.

“This decision recognizes the Department of Education has failed to implement the legislation properly,” ABA Executive Director Jack Rives said. “Our society depends on the dedicated efforts of public servants who accept lower-paid work, despite carrying large student loans. It is only fair that those workers be relieved of part of their loan burdens after 10 years of public service and 10 years of loan repayments, as this law promised them.”

The ABA and four public servants, represented by the law firm of Ropes & Gray, filed suit in December 2016, alleging mismanagement of the PSLF program. The lawsuit detailed how the department changed eligibility requirements for work that was clearly “public service.”

U.S. District Judge Timothy J. Kelly in Washington, D.C., said changes to the eligibility requirements, made several years after the program began in 2007, were “arbitrary and capricious.” Kelly called one of the Education Department’s main legal arguments “nonsense” and said a series of internal Education Department emails “decimates” another argument.

Kelly ruled in favor of three individual plaintiffs who worked several years in public service jobs and were initially approved for loan forgiveness, only to be notified years later that the approval was retroactively denied by the Education Department based on new rules.

“This decision recognizes the Department of Education has failed to implement the legislation properly,” ABA Executive Director Jack Rives said. “Our society depends on the dedicated efforts of public servants who accept lower-paid work, despite carrying large student loans. It is only fair that those workers be relieved of part of their loan burdens after 10 years of public service and 10 years of loan repayments, as this law promised them.”

The ABA and four public servants, represented by the law firm of Ropes & Gray, filed suit in December 2016, alleging mismanagement of the PSLF program. The lawsuit detailed how the department changed eligibility requirements for work that was clearly “public service.”