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ABA Sues for Public Interest Lawyers' Loan Forgiveness

If Uncle Sam and Scrooge had a child ...

It's possible but hard to imagine the creature that would evolve from that union. Yet more than a few lawyers have conjured up the image in the form of the U.S. Department of Education, which has taken back the offer of loan forgiveness for their student debts.

The American Bar Association and four public interest attorneys have sued the Department of Education and the Secretary of Education for reneging on the promise of the Public Interest Loan Forgiveness Program. The government has approved about 400,000 borrowers for the program, but changed its decision for some, including the ABA and its lawyers.

Government Giveth and Taketh Away

"The Department's actions violate law and are contrary to basic principles of fairness and deeply damaging to the critical public service missions of these plaintiffs and the ABA," according to the complaint filed in the U.S. District Court in Washington, D.C.

The case stems from the DOE's recent decision that lawyers at the ABA and other organizations do not qualify for loan forgiveness under the PILF. To qualify, an applicant must work for a government agency, a 501(c)(3) organization, or non-profit organizations providing specific public services. Other qualifications include a 10-year payment history on direct government loans and full-time work.

In the complaint for declaratory relief, the ABA contends the plaintiffs qualify because of their public services for organizations such as Vietnam Veterans of America, Paralyzed Veterans of America, American Immigration Lawyers Association, and the ABA's Division of Public Services. They said they had previously qualified for PILF, but then the government recently started denying applications.

Pulled the Rug, Too?

The plaintiffs said PSLF, enacted in 2007, was a major factor in their career choices. Without the program, they could not afford to work in public interest law because it is relatively low-paying.

"They can't tell graduates and borrowers that it's OK to take on massive student loan debt and be encouraged to work and dedicate their careers and lives to public service and then pull the rug out from under them," said Chong Park, who is representing the plaintiffs pro bono.

The government has not yet responded to the lawsuit, but has explained the qualifications for loan forgiveness in public education programs. According to a statement in July, about 60 percent of qualifying applicants work for government agencies, followed by 39 percent with 501(c)(3) organizations. About one-third of one percent work for other non-profits.

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