August 26, 2019

ABA encouraged by recent developments in Public Service Loan Forgiveness lawsuit

WASHINGTON, Aug. 26, 2019 — The American Bar Association and global law firm Ropes & Gray LLP are encouraged by recent developments concerning the administration of the Public Service Loan Forgiveness Program (PSLF).

Last week, several ABA employees, including two former ABA employees, received communications from FedLoan Servicing, which administers PSLF, that said the American Bar Association is an eligible employer under the PSLF and that their previous determination otherwise had been an error. These letters follow a February 2019 ruling from U.S. District Judge Timothy J. Kelly that the U.S. Department of Education had improperly changed the terms of the PSLF for some individuals who have dedicated their careers to public service.

“We are gratified that several affected employees have been notified their work with the American Bar Association qualifies as public service work under PSLF,” ABA Executive Director Jack L. Rives said. “We will continue to work with Ropes & Gray to ensure these and other ABA employees get full credit for their public service work.”

The ABA and four employees who perform public service, represented by Ropes & Gray, sued the Education Department and the Secretary of the Department of Education 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” after previously approving the same work, and after individuals had made major life decisions based on those prior approvals. The ABA claimed that the department and its contractor, FedLoan Servicing, hurt employees of some nonprofit groups by initially telling them they qualified for loan forgiveness, then reneging on those commitments years later.

“We are pleased that the Department of Education has decided not to appeal Judge Kelly’s order, and has instead started restoring loan payment credits to affected public servants,” Ropes & Gray partner Chong S. Park said. “The Department is finally doing the right thing and the positive impact this has on our individual plaintiffs -- and other student loan borrowers in similar positions -- is very encouraging.”  

The PSLF program, enacted in 2007 and signed into law by President George W. Bush, provides incentives for graduates to pursue full-time public service careers. It provides a mechanism to forgive student loan debt balances for men and women who make timely loan payments for 10 years while working full-time in public service jobs. The program broadly defines public service jobs as those providing “public interest law services,” “public education,” “public service for individuals with disabilities,” and “public service for the elderly,” among a variety of other categories.

The case is titled American Bar Association v. United States Department of Education, case number 1:16-cv-02476 in U.S. District Court for the District of Columbia. The lawsuit can be downloaded here.

With more than 400,000 members, the American Bar Association is one of the largest voluntary professional membership organizations in the world. As the national voice of the legal profession, the ABA works to improve the administration of justice, promotes programs that assist lawyers and judges in their work, accredits law schools, provides continuing legal education, and works to build public understanding around the world of the importance of the rule of law. View our privacy statement online. Follow the latest ABA news at www.americanbar.org/news and on Twitter @ABANews.