(NLJ/Diego M. Radzinschi)
The American Bar Association and a group of individual public interest lawyers sued the U.S. Department of Education on Tuesday claiming that the agency illegally walked back a loan-forgiveness program meant to encourage attorneys to take low-paying public-sector positions.
The lawsuit, filed Tuesday in federal court in Washington, claims that the department has arbitrarily tightened its definition of what sorts of organizations qualify as providers of “public interest law services” under the Public Service Loan Forgiveness Program. The moves, the lawsuit contends, have illegally trimmed the ranks of lawyers who qualify for the program enacted in 2007 by President George W. Bush, which forgives student loan debt for full-time public interest lawyers. To be eligible, attorneys must work in the public sector for 10 years and pay down their loans.
According to the suit, some lawyers have gotten word recently that their work doesn’t qualify for the program years after being told the exact opposite by representatives of the Education Department. The department’s eligibility decisions apply retroactively, meaning that years of work that lawyers assumed would apply toward loan forgiveness may not be recognized.
Getting the news was “like a punch in the gut,” said plaintiff Geoffrey Burkhart, a former public defender in Chicago who in 2014 took a job at the American Bar Association working on indigent defense issues.
Tuesday’s lawsuit, filed by pro bono lawyers at Ropes & Gray, claims that the department’s actions are an abuse of agency discretion and violate plaintiffs’ due process rights. The suit seeks an order finding that the ABA qualifies as a public interest employer and that individual plaintiffs are eligible for loan-forgiveness benefits. The suit also seeks to bar the department from denying eligibility retroactively.
ABA president Linda Klein said she thinks the plaintiffs in the case have been “betrayed” by the Department of Education.
“This was a promise from the federal government,” said Klein, senior managing shareholder in Baker, Donelson, Bearman, Caldwell & Berkowitz’s Atlanta office. “These people did everything right. They followed the rules. They did what they were told to do.”
The Department of Education didn’t immediately respond to a request for comment.
Burkhart, who graduated in 2008 from DePaul University College of Law, asked both the ABA and his student loan servicer whether his position with the ABA would qualify under the loan-forgiveness program before accepting and was assured by both that it did. In October of this year, more than two years after he took a position with the ABA, his loan servicer indicated that he was no longer eligible for the federal loan-forgiveness program, according to the complaint.
“It’s a helluva a lot of money to be casual about,” said Burkhart, who currently has about $200,000 in outstanding student loan debt and whose wife is currently expecting the couple’s second child. “I’ve got a family. I’ve got to make sure I’m doing the right thing here,” he said.
Kate Voigt, a 2011 Boston College Law School graduate who works on immigration issues at the American Immigration Lawyers Association in Washington, also signed on as a plaintiff. Prior to the lawsuit, she had been seeking answers via a Freedom of Information Act request about why her organization and others have been ruled ineligible by the department. So far, she said she’s received 198 completely redacted pages and a two-page letter addressed to her that she previously received.
Voigt said the whole process, including the lack of transparency, has been “disheartening to say the least.” Her frustration with the department has been compounded by the fact that she was told to sign up for an income-based repayment plan on her loans to remain eligible for loan forgiveness. The lower monthly payments under the plan resulted in her loan balance actually ballooning by $20,000 to $230,000 by the time the department changed course on her eligibility. “That’s one of the reasons I felt that I needed to sign up for the lawsuit,” she said.
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