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A federal district judge last week said the Education Department must reconsider the cases of three lawyers who sued in 2016 over their eligibility for the Public Service Loan Forgiveness program.
The American Bar Association sued the department on behalf of the three plaintiffs and a fourth lawyer who said they were previously led to believe they qualified for the benefit based on employment certification forms issued by their loan servicer, Fed Loan Servicing, until an apparent change in policy on qualifying employers. Congress enacted Public Service Loan Forgiveness in 2007 to allow borrowers of federal loans working in public sector or for certain employers in the nonprofit sector to have the remainder of their loans forgiven after making 120 qualifying monthly payments in an income-based repayment plan.
The department had argued in response to the lawsuit that borrowers shouldn't expect communications from their loan servicer to reflect a final ruling on eligibility for the benefit -- an assertion U.S. District Judge Timothy J. Kelly rejected in his opinion.
Kelly also said it was "nonsense" that the department argued the eligibility letters would have no "immediate or significant practical effect" on the plaintiffs.
