American Federation of Teachers sues Department of Education over student loan delays

The American Federation of Teachers (AFT) has filed a class action lawsuit against the U.S. Department of Education, naming Secretary Linda McMahon as a defendant. The legal action, filed in the U.S. District Court for the District of Columbia, alleges that the department has mismanaged the Public Service Loan Forgiveness (PSLF) program.

The plaintiffs claim the department has incorrectly calculated payment histories and failed to properly credit time served in qualifying employment. Specifically, the lawsuit highlights a backlog in the PSLF Buyback program, which allows borrowers to retroactively claim credit for months lost due to forbearance or deferment. As of spring, approximately 88,000 borrowers reportedly had pending buyback applications awaiting decisions.

Additionally, the AFT alleges that the department reduced qualifying payment counts for some borrowers earlier this year without notification, thereby extending the timeline for loan forgiveness eligibility. An Education Department spokesperson responded to the allegations by stating that payment count adjustments were corrections to coding errors from the previous administration intended to ensure accurate credit.