US teachers' union sues Trump administration over loan forgiveness delays — CNBC
In the United States, the American Federation of Teachers (AFT) filed a lawsuit against President Donald Trump's administration on October 30, accusing officials of unlawfully blocking student loan forgiveness for tens of thousands of borrowers. As CNBC reports, the union is challenging the US Department of Education's actions regarding the Public Service Loan Forgiveness program.
Claims by the plaintiffs
The Weingarten v. McMahon lawsuit was filed in the US District Court for the District of Columbia. The plaintiffs allege that Education Secretary Linda McMahon improperly administered the program by incorrectly counting borrowers' payment periods and failing to credit periods of employment that should have been counted.
The Public Service Loan Forgiveness program, signed by President George W. Bush in 2007, provides for the cancellation of federal student loans for certain nonprofit and public-sector workers after 120 payments, which usually corresponds to 10 years. Under the administration of Joe Biden, the program's rules were changed to make it easier to qualify for debt forgiveness. According to CNBC, this has already enabled loans to be forgiven for more than one million borrowers.
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Delays in reviewing applications
The lawsuit also concerns the PSLF Buyback program. It allows borrowers with 120 months of qualifying employment to submit a request to the Department of Education for retroactive payment for months missed because of deferment or payment suspension.
According to the court filing, as of spring, 88,000 borrowers were awaiting decisions under the Buyback procedure. The plaintiffs also said that earlier this year, the department reduced the number of qualifying payments credited to them without explanation, delaying debt forgiveness.
A Department of Education representative told CNBC that the agency is fixing errors in program code made during the Biden administration. According to the representative, these errors resulted in inaccurate payment counts for some borrowers.
