Lawsuit Accuses Education Department of Stalling Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program, created in 2007, forgives the remaining federal student-loan balance of borrowers who work for nonprofit or government employers after 120 qualifying monthly payments. A related “PSLF Buyback” option lets borrowers purchase credit for months spent in deferment or forbearance so those periods count toward the 120-payment threshold. In recent months, borrowers and advocacy groups have reported that the Education Department is failing to process both standard PSLF applications and Buyback requests, and that the department has removed previously recorded qualifying payments from borrowers’ online trackers on StudentAid.gov.

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• [date unspecified] – The American Federation of Teachers (AFT) and a coalition of student-loan borrowers file a federal class-action suit in the U.S. District Court for the District of Columbia, alleging unlawful delays and credit rollbacks.

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• April 30 2026 – The complaint notes that the Department was processing roughly 1,472 Buyback requests per month and that an 88,000-application backlog existed at that time.

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• June 11 2026 – Education Secretary Linda McMahon speaks at a roundtable on education at the Department of Justice in Washington, D.C.

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• The complaint states that pending PSLF Buyback applications nearly doubled from 49,318 to 89,720 between April 2025 and March 2026.

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• At the rate of 1,472 approvals or denials per month, the complaint estimates it would take over 18 months to clear the 88,000-application backlog reported as of April 30 2026.

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• One borrower cited in the suit had 118 qualifying payments as of June 2026 but was denied credit for July-October 2026, preventing her from reaching the 120-payment threshold.

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• Another borrower reported that the Department “clawed back” two of her qualifying payments, dropping her count from 118 to 116.

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Senior counsel **Laura C. The Education Department has not provided a comment to the reporting outlets.

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• Backlog figures differ: the complaint cites an 88,000-application backlog as of April 30 2026, while a separate Department status report referenced by Business Insider lists 88,000 pending applications and another source notes 89,720 pending Buyback requests as of March 2026.

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• The department’s explanation for credit rollbacks is attributed to “correcting data errors” from prior coding, but the lawsuit characterizes the reversals as unlawful. No independent audit of the department’s data-correction process has been disclosed.

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• “Secretary McMahon has flagrantly ignored her responsibility to help teachers, nurses and first responders under the buyback provision her department pledged to implement,” — Randi Weingarten, said AFT president

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• “The teachers, nurses, and public service workers of this country deserve the debt relief Congress promised to them, and AFT will fight to deliver on that promise,” — Laura C. Dismore

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• “This lawsuit demands that McMahon stop stalling and do her job,” — Randi Weingarten, said AFT president

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• “The law guarantees public service workers certain rights, and we will enforce those rights wherever and whenever they are violated,” — Laura C. Dismore

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