A lawsuit filed by the American Federation of Teachers alleges that the U.S. Department of Education has delayed applications from about 90,000 public service workers seeking relief through the federal Public Service Loan Forgiveness program.
The class action case focuses on PSLF buyback requests, which allow eligible borrowers to make retroactive payments for months when their loans were in deferment or forbearance. The union alleges that many applications have remained unresolved, in some cases for two years or longer, while borrowers wait to learn whether those months will count toward forgiveness.
What the lawsuit alleges
According to the allegations, the number of buyback applications rose from 49,000 in 2025 to roughly 90,000 in 2026. The union says applicants have received little information about when their requests will be processed.
The case also alleges that the Education Department has disqualified some payment months for thousands of borrowers and stopped updating qualifying-payment totals for some borrowers beginning in July 2026. Those totals are used to determine whether a borrower has reached the program’s required payment threshold.
- PSLF generally covers borrowers employed by the U.S. government or eligible nonprofit organizations.
- Borrowers must make 120 qualifying monthly payments before the remaining balance on eligible federal loans can be forgiven.
- The lawsuit challenges the handling of buyback applications and payment-count updates.
“Instead of processing applications in good faith, [Linda] McMahon has left 90,000 dedicated public employees in the lurch, forcing them further into debt while their applications just sit there,” AFT President Randi Weingarten said.
Linda McMahon is the secretary of the Department of Education. The allegations in the lawsuit have not been established by a court.
Program reach
Education Department data show that more than 1.2 million public service workers had received a combined $96.4 billion in student loan discharges through PSLF as of August 2026. The program applies to qualifying employment with government agencies and eligible nonprofits, rather than to a borrower’s occupation alone.
The buyback process is intended for borrowers whose months in deferment or forbearance prevented those months from counting toward the 120-payment requirement. A borrower seeking that credit must make the required retroactive payment, after which the months may be added to the qualifying-payment total under the program’s rules.
The AFT lawsuit puts the processing of those requests at the center of the dispute. It also challenges the treatment of payment records for borrowers who believe they have reached, or are close to reaching, the 120-payment requirement. The case seeks court action over the union’s allegations about application processing, payment eligibility and account updates.
