Photo: Diego M. Radzinschi/ALM

The American Bar Association will have to wait to find out if its employees will qualify for public service loan forgiveness.

The ABA and the U.S. Department of Education were in court Wednesday for a hearing on the ABA's request for a preliminary injunction stating that its employees are eligible for loan forgiveness, but U.S. District Judge Timothy Kelly of the District of Columbia did not issue a ruling from the bench.

The two-hour hearing was the latest in a 20-month-old lawsuit the ABA filed against the Education Department, after it told several ABA employees who believed they qualified to have their federal loan balances dismissed after 10 years that they are in fact ineligible.

“The public service missions and financial well-being of our clients, and of other dedicated public servants across America, are hanging in the balance,” said Ropes & Gray partner Chong Park, who is representing the ABA. “We were glad to present the urgency of their situations to the court and look forward to its decision. Our hope is that these service-oriented professionals will be allowed to benefit from the loan forgiveness program they signed up for.”

Chetan Patil, an attorney in the U.S. Department of Justice's Civil Division who is representing the Education Department, did not immediately respond to requests for comment on the hearing Wednesday.

The ABA earlier this month asked Kelly to issue a preliminary injunction clarifying that its employees are eligible for the Public Service Loan Forgiveness Program. The Education Department has previously determined that the national bar group does not meet the criteria of a public service organization because public service is not the overarching focus of its work.

But the ABA said its South Texas Pro Bono Asylum Representation Project, which provides free legal representation to detained immigrants, has been devastated by the department's denial. The project has had a difficult time recruiting and retaining staff because they cannot count on public service loan forgiveness, and is now half-staffed, according to court documents. Meanwhile, demand for the project's services skyrocketed this summer when the Trump administration introduced its family separation policy, the ABA said.

But the Education Department counters that a preliminary injunction is inappropriate given that the parties are awaiting the court's decision in cross-motions for summary judgment, which have been pending for the past year after the case was transferred to a new judge. A preliminary injunction stating that ABA employees do qualify for public service loan forgiveness would still leave the plaintiffs in limbo, since that ruling could be reversed on summary judgment, the Education Department argues.

Under the Public Service Loan Forgiveness Program, which was enacted in 2007, federal borrowers will have the remainder of their loans forgiven after 10 years of working at a qualified public service employers and making 10 years of loan payments. The first cohort of borrowers eligible for forgiveness came in 2017, but a new report from the Education Department reveals that only a tiny fraction of those who have applied for forgiveness have been approved. A mere $5.5 million in loans have been forgiven thus far.