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They Thought They Qualified for Student Loan Forgiveness. Years Later, the Government Changes Its Mind.

December 20, 2016 /

Hundreds of thousands of people with piles of federal student loan debt had not been too concerned because they were counting on a federal government program that would forgive those loans if they worked at least 10 years in a public service job. But what happens if the definition of “public service” seemed to change midway through that decade? On Tuesday, the American Bar Association and four lawyers who thought they qualified filed suit against the Department of Education trying to answer that question. The department had informed several of them that their jobs would make them eligible for loan forgiveness, but they later received letters saying that the ruling had changed. All four, according to the legal brief, might have picked different jobs, borrowed less or entered different repayment plans had they known the rules would change.