All full-time ABA employees are eligible for federal loan forgiveness program after litigation settles
Image from Shutterstock.com.
All full-time employees of the ABA are now eligible for the Public Service Loan Forgiveness Program following a settlement in the association’s lawsuit against the U.S. Department of Education.
ABA Executive Director Jack Rives announced Tuesday that the ABA has received a letter from the Education Department stating that all full-time ABA employees are employed in “a public service job” for a “public service organization.”
As a result of that determination, full-time employees with outstanding direct federal loans are eligible for participation, as long as they meet other program requirements.
The letter was a condition of the ABA’s settlement agreement, which called for the ABA to drop an appeal of its lawsuit against the Education Department when the letter is received, Rives said in his announcement to ABA employees.
“So it is official,” Rives wrote in an email to ABA employees. “All full-time employees of the ABA meet the PSLF public service employment qualification!”
The PSLF Program, established in 2007, offers loan forgiveness for those who make monthly loan payments for 10 years while working full time in public service. ABA employment was deemed to be public service work until the Education Department changed its interpretation in 2016.
The ABA and four lawyers who were dropped from the program—including two of whom worked for the ABA— filed the lawsuit in December 2016. Ropes & Gray represented the ABA pro bono.
U.S. District Judge Timothy Kelly ruled in February 2019 that the Education Department did not adhere to notice standards when it changed its interpretation, and the changes were arbitrary and capricious in violation of the Administrative Procedure Act.
Kelly ruled for three of the four lawyers who sued but ruled against a fourth who worked for Vietnam Veterans of America. Kelly said the record did not support that lawyer’s claim.
Kelly also ruled against the ABA’s own claim. The Education Department’s determination that the ABA was not a public service organization under the program was not a final agency action, Kelly said, and it couldn’t be challenged at this stage under the APA.
The Education Department did not appeal parts of the ruling against it and began restoring loan payment credits last summer to some ABA employees who were dropped from the program.
But the ABA appealed the portion of the decision against the association to the U.S. Court of Appeals for the District of Columbia Circuit. That appeal was dropped as a result of the settlement.
The Education Department said in its letter to the ABA that its decision doesn’t restrict the agency from changing the definition of a public service organization in new regulations in the future.
Ropes & Gray partner Chong Park, one of the lawyers who represented the ABA, says the settlement is “essentially a complete victory for all of the plaintiffs.”
Park told the ABA Journal that the Education Department has also acknowledged that the Vietnam Veterans of America and its employees qualify for loan forgiveness. That is a victory for Jamie Rudert, a lawyer with the group who lost his motion for summary judgment in the district court.
“We are very gratified by the settlement, which ensures that the ABA and ultimately all of the individual plaintiffs have received the relief that they originally sought in the complaint filed approximately four years ago,” Park says.
Rives also praised the settlement.
“We are pleased the Department of Education now fully accepts providing loan forgiveness to many people who rightfully earned it,” Rives said in a statement. “Without the dedicated public service of so many attorneys, our nation would not be able to provide services to those in need. Student loan forgiveness is a small but very meaningful way to repay young people who spend 10 years of their lives in lower-paying jobs to serve the public.”
Updated Feb. 18 at 3:49 p.m. to include comments from Chong Park. Updated on Feb. 19 at 12:55 p.m. to include statement from Jack Rives.
