Department of Education Seeks to Toss Loan Forgiveness Lawsuit

Department of Education Seeks to Toss Loan Forgiveness Lawsuit

The U.S. Department of Education (DoE) has filed a motion for summary judgment (MSJ) in a lawsuit over attorneys who were removed from the Public Service Loan Forgiveness Program. In its MSJ, the DoE is claiming that the American Bar Association, who filed the complaint against the federal agency, sued too soon.

 

About the Dispute

 Created under the Obama administration, the Public Loan Forgiveness Program allows individual borrowers who work in certain not-for-profit and public service jobs to have the outstanding balance of their school loans forgiven after they have made 120 on-time eligible payments under the program while still working in those eligible jobs.

Last December, the ABA filed a lawsuit against the DoE on behalf of four attorneys, including two former ABA employees whose previously approved Public Loan Forgiveness Program eligibility had been revoked by the DoE. The DoE informed the lawyers that the previously approved employers, which included the ABA, the American Immigration Lawyers Association, and the Vietnam Veterans of America, did not qualify under the loan forgiveness program as public service organizations that provide public and legal education to the community.

The DoE argues that some interim notifications sent to borrowers had mistakes and the corrections were not new policies applied retroactively. The DoE also argues the ABA’s lawsuit does not fall within the zone of interests protected by the loan forgiveness statute, and its determinations are reasonable when deciding whether or not public service jobs qualify under the program.

The ABA likewise filed a MSJ, asking a judge to require the DoE to stop issuing retroactive denials. Other relief requested included restoring the individual plaintiffs’ eligibility for the loan forgiveness program. Part of the ABA’s concern is that thousands made major life decisions for their careers based on inaccurate information provided by the DoE, taking jobs and uprooting their lives based on this information.

 

Stay Informed

The decision that will be rendered on this case will have a widespread effect on professionals of all industries – doctors, lawyers, teachers, engineers, etc. – who were under the impression they could have the balance of their student loans forgiven by the DoE if they qualified. To stay informed on the case, follow any news agency reporting on the topic.

 

 

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