Education Dept. Accused Of Blocking Student Loan Forgiveness

The American Federation of Teachers, representing 1.8 million members, has intensified its legal challenge against the Department of Education and Education Secretary Linda McMahon. In an amended complaint filed this week (PDF File), the union seeks class action status on behalf of millions of borrowers it argues are unlawfully being denied access to income-driven repayment (IDR) programs and Public Service Loan Forgiveness (PSLF).

The filing follows a timeline in which the Department froze processing of IDR applications for months, leaving a backlog that started at two million borrowers, but still is blocking more than one million borrowers. The AFT argues that even as processing resumed, the Department has effectively blocked forgiveness by halting loan forgiveness under IDR plans and allowing a separate PSLF Buyback backlog to climb above 74,000 applications.

The complaint alleges these delays and denials violate federal statutes that require the government to offer affordable repayment options and cancel loans after 20 or 25 years of repayment, or after ten years of public service. The union is pressing the court to enforce these obligations before the end of the year, when the student loan tax bomb resumes.