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Two attorneys with New York City’s Administration for Children’s Services have filed suit charging that the federal government has reneged on a loan forgiveness program for public interest lawyers. In a class action suit that could affect loan cancellation programs for public interest lawyers nationwide, the attorneys have also sued New York Law School, charging that the school failed to go to bat for them and fight the federal government’s change in policy. The central allegation in De La Mota v. U.S. Department of Education, 02 CV 4276, is that the U.S. Department of Education, through New York Law School, refused to cancel the lawyers’ Perkins federal student loans, even though the attorneys serve high-risk children from impoverished backgrounds in their jobs with the Administration for Children’s Services (ACS). Name plaintiffs Marisol de La Mota and Froebel Chungata had been eligible for the loan cancellations until April 2001, when the Department of Education issued a directive saying that eligibility extended only to attorneys who worked “directly” with high-risk children. “The DOE’s purported justification for this wholesale denial rests on a facially absurd distinction between those who provide legal services ‘directly’ to high-risk children — for whom the federal guaranteed loan cancellation benefits now apply — and those who are employed by ORGANIZATIONS which provide such services, which the DOE claims, means that they are only ‘indirectly’ providing services to high-risk children,” attorneys Glenn Greenwald, Joel Christoph and David Elbaum of Greenwald Christoph charge in the complaint. “This putative distinction is as groundless as it is nonsensical.” The loan cancellation entitlement is outlined in 20 U.S.C. � 1087ee(a)(2)(I) and 34 C.F.R. � 674.56(b), “two statutes which unambiguously embody Congress’ long-standing public policy of encouraging professionals to enter the public interest sector … ,” the complaint states. Section 1087 states that federal Perkins loans should be canceled during the duration of a borrower’s service “as a full-time employee of a public or private non-profit child or family service agency,” and � 674.56(b) requires an institution to “cancel up to 100 percent of the outstanding balance” of the loan for similar work, whether provided through a public or a private nonprofit child or family service agency. But under the “unannounced policy” being pursued by DOE Secretary Roderick R. Paige, the lawyers state, the DOE is directing “or otherwise supporting” decisions made by schools such as New York Law School to terminate or withhold loan cancellation benefits. And the reversal of the policy was also made retroactive, they charge, meaning that former New York Law School students whose loans had been previously cancelled now have “substantial balances” owing on the loans. LIMITED INCOME Both De La Mota and Chungata have worked in the ACS’ Child Support Litigation Unit since 1999. De La Mota, 31, was informed by New York Law School that she was ineligible for a loan cancellation in August 2001, and her request to the DOE ended with the Department backing the law school. She said Wednesday that she initially attempted to litigate the matter in Small Claims Court and reach a settlement, but was rebuffed by an attorney for the school. De La Mota also said she was told by an employee of the school’s financial aid office that as many as 30 other former students were in the same predicament. De La Mota said the amount of money at stake in her fight with the school and the DOE is relatively small, “about $1,000,” but, ironically, she is still receiving loan cancellations for her work at ACS for college loans and loans from CUNY Law School, where she spent her first year of law school. The loan forgiveness program requires applicants to verify their employment and ask for a deferment on their loan. At the end of one year, 15 percent of the loan is forgiven and the applicant applies for another one-year deferment, followed by another 15 percent cancellation. Under the program, it is possible that a former student who continues to help high-risk children could have their entire loan cancelled after five years. Froebel Chungata, also 31, said the amount in dispute between himself and the vendor that handled the loan program for New York Law School was only “about $3,000″ out of the some $70,000 in outstanding student loans he must still pay back. “We’re not talking about a lot of money,” he said. “But it does make a difference with the limited income we make.” Richard A. Matasar, dean of New York Law School, said Wednesday “the law school is compelled by the Department of Education to follow the law and the Department has determined that these students are not entitled under the law to debt forgiveness.” “We would be delighted if they got the money, but these are not our funds,” Matasar said. “We are in a purely ministerial position here. We don’t profit if the students don’t get debt forgiveness, nor are we in a worse position if they do get some relief.” An Education Department spokeswoman said the agency does not comment on pending suits.

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