The American Federation of Teachers filed a federal class-action lawsuit on Oct. 30 against the Education Department, alleging that delays and errors are preventing public servants from receiving relief through the Public Service Loan Forgiveness program.
The union filed the complaint in federal court in Washington, D.C. It alleges that some borrowers have waited nearly two years for the Federal Student Aid office to process paperwork tied to their eligibility. Other borrowers, according to the lawsuit, have lost months of payment credit that they had already earned toward cancellation.
“I hear these stories all the time across America. People have done what they're supposed to do. They've actually filed all the paperwork and then they hear nothing.” — Randi Weingarten, president of the American Federation of Teachers
The Education Department did not respond to a request for comment. The lawsuit is an allegation, not a court finding.
How the forgiveness program works
Congress created PSLF in 2007 to encourage people to work in public service despite their student debt. The program can erase the remaining balance on eligible federal student loans after a borrower makes 120 monthly payments while working for a qualifying government or nonprofit employer. That generally represents about 10 years of public service.
Teachers, nurses and police officers are among the workers who may qualify, according to the report. The union said that three-quarters of its nearly 2 million members are eligible for the program.
| Program detail | Information reported |
|---|---|
| Required payments | 120 monthly payments |
| Typical service period | About 10 years |
| Workers who may qualify | Government and nonprofit employees, including teachers, nurses and police officers |
| Pending buyback applications cited in the lawsuit | 88,000 |
Dispute centers on buyback applications
The complaint focuses in part on the program’s buyback option. That process allows some borrowers who have completed at least 10 years of public service to make retroactive payments for months when their loans were in deferment or forbearance. If the payments qualify, those months can count toward the 120-payment requirement.
The union alleges that the department’s processing system has moved slowly while applications have accumulated. The lawsuit describes a backlog of 88,000 pending applications. For borrowers who are close to the required payment count, the delay can postpone a decision on whether their remaining federal student loan balance will be canceled.
The complaint also alleges that some borrowers have seen their qualifying payment totals reduced after previously receiving credit. The American Federation of Teachers has repeatedly challenged the Trump administration in court over student-loan forgiveness. The latest case seeks to address what the union describes as delays and mistakes affecting public servants across the country.
- The lawsuit alleges that some PSLF paperwork has remained unprocessed for nearly two years.
- It cites 88,000 pending applications connected to the buyback process.
- Borrowers may lose months of previously credited progress, according to the complaint.
