breach of contract

Here's a piece I wrote for the Connecticut Law Tribune about a lawyer's law school debt:

Law school students learn how to argue over contracts. But that doesn't necessarily mean they can litigate their way out of a contract to pay their law school loans. One Branford-based attorney is facing this reality after a federal judge ruled that, more than two decades after receiving his law degree, he owes the federal government more than $236,000 for his legal education.

Gregory P. Cohan went to the University of Bridgeport Law School—now the Quinnipiac School of Law—and got his Connecticut bar license in 1993. But he hasn't made a payment on his law school loans since 2001. A few years before that, he consolidated his federal law school loans under the William D. Ford Federal Direct Loan Program, which ties monthly repayment amounts to an individual's income. After 25 years, any balance left on loans is forgiven.

According to Cohan's calculations, his payment should have been about $100 a month. But the government puts the number at $300.

Cohan argued in court papers that because the federal Department of Education incorrectly calculated his monthly repayment, the government materially breached his student-loan agreement, made it impossible for him to pay back his loans and thus discharged his duty to perform under the contract.

"The defendant, the non-breaching party, is entitled to the benefit of the bargain," Cohan wrote. "The plaintiff agreed to reasonable, affordable payments for [a] period of 25 years, then forgiveness of any unpaid balance. The parties agreed that defendant would not be charged more than he could afford to pay, and that he would not have an unmanageable debt hanging over his head for the rest of his life."

The disagreement stems from how Cohan's income was calculated. Cohan reported that his 2001 income was $14,605. But Assistant U.S. Attorney Christine Sciarrino, who handled the case for the federal government, took issue with Cohan's calculations. Because income tax filings actually reflect the previous year's income, Sciarrino said Cohan couldn't officially compute his 2001 salary in December of that year. She said he should have used his adjusted gross income from 2000, which was $26,960. That would have put his loan repayment burden at $310.17 per month, she said.

U.S. District Judge Jeffrey A. Meyer acknowledged that it was within the government's discretion to use the alternative documentation Cohan submitted for his annual income instead of his actual tax returns. But there isn't any evidence in the record, Meyer said, that Cohan even tried to pay the $100 a month that he believed he actually owed beginning in 2002.

"Defendant has presented no evidence to support his statement at oral argument that the government 'made it impossible for [him] to make the payments' or that he was unable to calculate his payments because he lacked access to the Federal Register," Meyer said. "Defendant is and was a practicing attorney. In fact, this debt arises directly as a result of his legal training. … He has provided no reason why he could not have done his research and mailed payments many years ago."

When Cohan consolidated his loans in August 1999, he owed $97,658.55. Now he has been ordered to pay $236,535. That's because while the case has been pending, the unpaid principal balance has been accruing at 8.25 percent every year.

The federal government declared that Cohan was in default on Sept. 17, 2002, and his entire loan balance became due 270 days after payment was due at the end of 2001. The government did not file to collect on Cohan's loans until May 2011.

Sciarrino noted that Cohan was required to pay under the income contingent repayment plan because direct consolidation loans must be repaid that way if a borrower has defaulted on the underlying loans. Cohan defaulted on his underlying loans in the 1990s, according to the opinion.

Cohan did not respond to a request for comment. The U.S. Attorney's Office declined to comment.