American Bar Association in Chicago. (Photo: Diego M. Radzinschi/ALM)

The American Bar Association and the U.S. Department of Education are headed to federal court Wednesday to wrangle over eligibility for the department's popular Public Service Loan Forgiveness program.

The ABA has asked Judge Timothy Kelly of the U.S. District Court for the District of Columbia to issue a preliminary injunction stating that its employees qualify for loan forgiveness—a claim the department refutes. The department has countered that ABA employees aren't eligible for the program because the ABA is not primarily a public service organization, even if certain ABA projects perform public service functions.

At the core of the issue is the ABA's South Texas Pro Bono Asylum Representation Project, known as ProBAR, which provides detained immigrants in Southern Texas with free legal counsel. The ABA claims that recruiting and retaining attorneys for the project has become extremely difficult since the department determined in 2016 that those lawyers are not eligible to have their federal loans forgiven after 10 years, as employees of qualifying public service organizations can.

The ABA claims in court papers that ProBAR is on the brink of collapse as the result of understaffing. The ABA asserts that donors are threatening to pull financial support due to a large number of staff vacancies and that demand is skyrocketing for its services in light of the Trump administration's family separation policy. Hiring and keeping ProBAR attorneys would be much easier if the ABA were deemed a qualifying employer under the public service loan forgiveness program, the ABA claims.

But in its opposition motion, the Education Department argues that the ABA waited too long to seek a preliminary injunction—it first sued over loan forgiveness eligibility in December of 2016—and that a preliminary injunction is premature given that the parties are awaiting a decision on cross-motions for summary judgement. (The case has been on hold for a year after it was transferred to a new judge.)

Moreover, a preliminary injunction stating that ABA employees qualify for public service loan forgiveness would still leave the plaintiffs in limbo, because the case could still be dismissed on summary judgment, the department argues. A preliminary injunction on behalf of the ABA may also have wider implications for the loan forgiveness program, according to the Education Department.

“The ABA's motion is flawed because it does not demonstrate that the ABA will suffer imminent irreparable harm in the absence of preliminary injunctive relief,” reads the Education Department's opposition motion, which was filed by attorneys in the U.S. Department of Justice's Civil Division. “Though the ABA focuses on the alleged harm suffered by one of its projects, it never asserts that the organization as a whole is suffering irreparable injury.”

The ABA counters that ProBAR's precarious position provides ample reason for the court to step in an immediately clarify that ABA employees do, in fact, qualify for public service loan forgiveness.

“[The Education Department's opposition motion] displays a callous indifference toward the plight of public servant student loan borrowers and their employers and to the ABA's inability to provide crucial public interest legal services to a vulnerable population of immigrants—including children—in immigration proceedings,” reads a brief filed by the ABA, which is represented by attorneys from Ropes & Gray.

The ABA originally filed suit on behalf of itself and four plaintiffs who work for ProBAR and initially believed they qualified for public service loan forgiveness, only to later be told by the Education Department that they do not. In several cases, the Education Department itself told the borrowers that they qualified, only to reverse course.

Under the Public Service Loan Forgiveness Program, which was enacted in 2007 during George W. Bush's presidency, federal borrowers who work for 10 years at qualified public service organizations and make their required loan payments for that period are eligible to have their loan balances forgiven. The program is intended to spur more people to take public service jobs, which often pay less than private sector ones.

But the Education Department does not make final determinations about qualified employment until borrowers apply to have their loans forgiven—that is, after 10 years of payments. Borrowers may file annual certification forms with the department to clarify their intention to apply for loan forgiveness, but no decisions on eligibility are final until 10 years of payments, under Education Department policy.

That timeline is yet another reason that the education department has asked the court to dismiss the ABA's suit, because no final determination has been reached in the case of the ABA plaintiffs and that their lawsuit is premature.

But ProBAR's immediate future is dire, according to the ABA's preliminary injunction motion.

“Virtually all of the attorneys to have left ProBAR in recent years, and others who have turned down job offers from ProBAR, have done so for the same reason: the uncertainty regarding ABA employees' eligibility for the PSLF program,” it reads. “Many attorneys can afford to work for public interest organizations only if loan forgiveness under the PSLF program—after ten years of working for the organization and making the required payments on the loans—is assured.”