Summary
The American Federation of Teachers filed a lawsuit against the U.S. Department of Education and its Secretary, Linda McMahon. The lawsuit claims that the Department has unlawfully delayed relief under certain student loan forgiveness programs. This comes as changes to employer qualifications for loan forgiveness are being discussed.
Key Facts
- The lawsuit was filed in the U.S. District Court for the District of Columbia.
- It targets delays in income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs.
- As of August 2025, there is a backlog of over one million IDR applications.
- The Department of Education is working on new rules to change which employers qualify for PSLF.
- IDR and PSLF help cancel remaining student-loan balances under specific conditions.
- If IDR discharges are delayed past December 31, 2025, borrowers could face taxes on forgiven amounts.
- PSLF discharges remain tax-free under current laws.
- The Department reported processing delays in loan forgiveness applications.
