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Teachers union sues McMahon over 90,000 stalled loan forgiveness claims for public workers

The AFT says the Education Department is sitting on buyback applications and erasing credit teachers and nurses already earned.

Teachers union sues McMahon over 90,000 stalled loan forgiveness claims for public workers
Stock photo. Photo by Nathan Cima on Unsplash

The American Federation of Teachers and nine current and former public service workers sued Education Secretary Linda McMahon on Friday, accusing her department of illegally stalling student loan forgiveness that teachers, nurses, public lawyers and other public servants have already earned.

The proposed nationwide class action, filed Oct. 30 in the U.S. District Court for the District of Columbia, targets the Public Service Loan Forgiveness program, known as PSLF. The complaint says the department is "trapping in debt borrowers whose loans should be forgiven" by sitting on nearly 90,000 applications, erasing credit borrowers had already been given, and failing to post payments they recently made.

What PSLF promises

Congress created PSLF in 2007. Under the statute, the Education Secretary "shall cancel the balance of interest and principal due" on eligible federal Direct Loans once a borrower makes 120 qualifying monthly payments, roughly 10 years, while working full time for a government or nonprofit employer.

The "buyback" option lets borrowers with at least 10 years of public service pay for months their loans sat in deferment or forbearance, so those months count toward forgiveness. For many workers, a buyback is the last step before their debt is wiped out.

A backlog that nearly doubled

The complaint relies on the department's own status reports, filed in an earlier AFT case before Judge Reggie Walton. Those reports show 49,318 pending buyback applications in April 2025 and 89,720 by March 2026. At the department's fastest observed pace, the complaint says, clearing the pile would take more than 18 months. Processing a buyback, the union argues, "is ministerial and does not require any discretionary action."

The suit also says that starting in August 2026 the department sent "Qualifying Payment Reduction Update" notices that cut borrowers' payment counts, blaming "coding errors." Elizabeth Schoepflin, a speech-language pathologist from Massapequa, New York, lost 14 months of credit, according to the complaint. And since July, it says, the department has stopped posting new qualifying payments for some borrowers.

David Petley, a critical care pharmacist at a rural Oregon hospital and a plaintiff, applied for a buyback on May 1, 2025, his first day of eligibility. He told reporters at a Boston news conference that he is still waiting.

"This uncertainty has real financial consequences," Petley said, according to Spectrum News. "My monthly loan payments are now over 70% higher than the payments owed for the months that I'm seeking to buy back."

Randi Weingarten, president of the AFT, said public servants "held up their part of the bargain. The federal government has not." Sen. Ed Markey (D-Mass.), who joined the news conference, said many borrowers "can't even see their current payment count because it hasn't even been updated since July."

The Education Department did not respond to requests for comment from Spectrum News or WBUR before their stories ran. A federal watchdog found the department lost at least 40% of its workforce in early 2025, WBUR reported.

What the union wants

The suit, Weingarten v. U.S. Department of Education, No. 1:26-cv-03826, brings three claims under the Administrative Procedure Act, the law that lets courts strike down unlawful or arbitrary agency action. It asks a judge to order the department to process buybacks on time, restore clawed-back credit, count every qualifying payment and cancel loans for every borrower who qualifies. Protect Borrowers and the law firm Berger Montague represent the plaintiffs.

No hearing date has been set. The department will have a chance to respond, and the court must decide whether to certify the class.

Who wins, who loses

About three-quarters of the AFT's nearly 2 million members are eligible for PSLF, a union spokesperson told WBUR. The program also covers police officers, firefighters, social workers and anyone else working for a public or nonprofit employer. Every month a buyback sits unprocessed, those workers keep paying on debt the law says should be gone.

The AFT has won here before. Its earlier settlement in Weingarten v. DeVos helped more than 1 million public workers receive $78 billion in forgiveness, the union says.

If you are pursuing PSLF, log in to StudentAid.gov, save a screenshot of your qualifying payment count today, and keep every notice the department sends. If your count drops, that record is your proof.

Sources

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