Summary
The American Federation of Teachers (AFT) has filed a lawsuit to push the U.S. Department of Education to cancel student loans for borrowers who meet forgiveness requirements. The department is accused of delaying the process, affecting borrowers on income-driven repayment plans and those eligible for the Public Service Loan Forgiveness program. The delays are partly blamed on legal issues related to a plan introduced by the Biden administration.
Key Facts
- The American Federation of Teachers (AFT) filed a lawsuit against the U.S. Department of Education.
- The lawsuit asks for the cancellation of student loans for eligible borrowers.
- Borrowers affected include those on income-driven repayment plans and Public Service Loan Forgiveness programs.
- A temporary rule prevents canceled loan debt from being taxed until January 1, 2026.
- The Biden administration's SAVE plan has legal issues affecting loan cancellation eligibility.
- There is a backlog of nearly 75,000 applications for loan forgiveness under the Public Service Loan Forgiveness program.
- The Department of Education states it will refund any overpayments once discharges resume.
