AFT Sues U.S. Department of Education Over Student Loan System Crisis

AFT Files Lawsuit Against U.S. Education Department Over Student Loan System Disruptions

WASHINGTON — The American Federation of Teachers (AFT), representing 1.8 million members, has initiated legal action against the United States Department of Education (ED). The lawsuit claims that recent actions by the ED have disrupted the student loan system, denying borrowers access to income-driven repayment (IDR) plans and hindering progress toward Public Service Loan Forgiveness (PSLF).

Federal education officials recently removed the application form for IDR plans from the ED’s website and instructed loan servicers to cease processing applications. IDR plans allow borrowers to make loan payments based on their income and family size and are crucial for public service workers to benefit from PSLF. This decision directly affects teachers, nurses, first responders, and other public service workers nationwide.

“By effectively freezing the nation’s student loan system, the new administration seems intent on making life harder for working people, including for millions of borrowers who have taken on student debt so they can go to college,” stated AFT President Randi Weingarten. She added, “The AFT has fought tirelessly to make college more affordable by limiting student debt for public service workers and countless others—progress that’s now in jeopardy because of this illegal and immoral decision to deny borrowers their rights under the law.”

The lawsuit, titled AFT v. U.S. Department of Education, has been filed in federal court in Washington, D.C., with AFT being represented by the Student Borrower Protection Center (SBPC) and Berger Montague PC. It seeks to restore access to both IDR and PSLF programs.

“Student loan borrowers are desperate for help, struggling to keep up with spiking monthly payments in a sinking economy,” said Mike Pierce, SBPC Executive Director. “Borrowers have a legal right to payments they can afford and today we are demanding that these rights are enforced by a federal judge.”

E. Michelle Drake, Executive Shareholder at Berger Montague PC, added, “Congress required that the Department of Education offer IDR plans and provide borrowers access to these plans. We look forward to restoring borrowers’ access to these vital, necessary, and required programs.”

The Trump Administration’s move to halt access to affordable student loan payments marks a significant departure from the bipartisan consensus on the importance of IDR plans. Established through legislation in 1992, 1993, and 2007, IDR plans have been a cornerstone of the student loan safety net, with the 2007 College Cost Reduction and Access Act creating an IDR option that was previously uncontested in court.

The Department of Education claims that the removal of IDR applications is in response to a decision by the 8th Circuit Court, which expanded an injunction affecting the Saving on a Valuable Education repayment plan. However, this interpretation has resulted in significant disruption for borrowers seeking affordable monthly payments.

Before the halt in application processing, over 1 million borrowers were waiting in a backlog for their applications to be processed. The Department has yet to provide any guidance on when the applications will be reinstated.

Student Borrower Protection Center is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans, engaging in advocacy and litigation strategy to protect borrowers’ rights.

Berger Montague is a leading law firm representing plaintiffs in complex civil litigation, having recovered over $50 billion for clients across various legal fields.

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