American Bar Association v. United States Department of Education, 370 F. Supp. 3d 1 (D.D.C. 2019), was a case filed in December 2016 in the United States District Court for the District of Columbia that reached its final resolution in February 2020, in which the ABA and four individual public interest lawyers (two of whom were former ABA employees) succeeded in preventing the United States Department of Education from denying individuals employed by certain "public service organizations" eligibility to participate in the Public Service Loan Forgiveness (PSLF) program. Following an initial victory on summary judgment for three of the individual plaintiffs in the district court's February 2019 ruling, the ABA and the fourth individual plaintiff settled the outstanding issues with the Department. As a result, the four individual plaintiffs and all employees of the ABA, as well as other similarly situated individuals, are eligible to participate in the PSLF program.
History
The PSLF program was signed into law by President George W. Bush in 2007 and provided that anyone working full-time in eligible public service jobs could have the remaining balance of their student loans issued under the Federal Direct Student Loan Program forgiven after making 120 qualifying monthly payments. In 2008, the Department of Education issued a regulation defining the term "public service job" to include any full-time position at an eligible "public service organization," including a federal, state, local, or Tribal government; a 501(c)(3) not-for-profit organization; and any other not-for-profit organization that provides any of a number of listed "public services," including "public interest law services" and "public education," among others. The ABA is a not-for-profit 501(c)(6) organization. Several ABA employees, including two who were individual plaintiffs in the case, worked on public interest law projects for the organization, such as assisting undocumented immigrants on the U.S. southern border and expanding access to justice for indigent individuals. After initially reviewing the Employment Certification Forms submitted by those employees, the Department of Education sent letters confirming that their ABA employment would qualify them for the PSLF program, provided that they continued to make monthly payments for the required 120-month period. Similarly, the remaining two individual plaintiffs, who worked for the not-for-profit 501(c)(6) American Immigration Lawyers Association (AILA) and not-for-profit 501(c)(19) Vietnam Veterans of America (VVA), provided public education services on issues related to immigration law and services to individuals with disabilities and the elderly (i.e., Vietnam War veterans), respectively; the Department likewise informed them that their employment qualified them for participation in PSLF. A few years later, however, the Department issued each of these individuals notices stating that their employment did not qualify for PSLF, that the prior approval notices had been issued in error, and that none of the payments made on their loans while employed by these organizations would count toward the 120-payment threshold.
Following unsuccessful attempts by the ABA to resolve its dispute with the Department, the ABA and the four individual plaintiffs filed suit on December 20, 2016, seeking to force the Department to reinstate the plaintiffs' PSLF eligibility. The plaintiffs alleged that the Department had improperly changed its interpretations of the PSLF qualifying criteria as defined in the statute and regulation, in violation of the Administrative Procedure Act (APA) and the plaintiffs' due process rights under the Fifth Amendment. The Department's primary arguments in defense were that the lawsuit was premature since none of the individuals in question had yet reached the 120-payment threshold that would allow them to apply for PSLF, and therefore that there had been no "final agency action" giving rise to an APA claim; and that the Department had not changed its interpretations but instead had merely corrected errors committed by its student loan servicer, which was responsible for administering the PSLF program. The Department also defended its denials by arguing that the ABA and the other organizations were not public service organizations because their "primary purpose" was not to provide one of the services listed in the regulation, and because AILA's public education services were not provided in a "school or school-like setting."