The American Federation of Teachers (AFT) has filed a high-profile class-action lawsuit against the U.S. Department of Education, alleging that the agency unlawfully blocked access to crucial student loan relief programs. The union claims that these actions have prevented thousands of borrowers—particularly public service workers—from enrolling in affordable repayment plans and making progress toward student loan forgiveness.
This legal challenge comes at a time of heightened tension in the student loan system, with millions of borrowers still struggling to navigate repayment options after years of policy changes, pandemic-era pauses, and shifting court rulings.
The Core of the Dispute
At the center of the lawsuit are Income-Driven Repayment (IDR) plans, including the Biden administration’s SAVE Plan, which was designed to reduce monthly payments and accelerate loan forgiveness for qualifying borrowers. According to the complaint, the Education Department abruptly disabled access to online applications for these plans earlier this year, leaving borrowers unable to adjust their repayment options.
AFT argues that this decision has had a direct impact on those seeking Public Service Loan Forgiveness (PSLF). PSLF requires borrowers to make 120 qualifying monthly payments under an eligible repayment plan while working in public service. If borrowers cannot access IDR plans, they cannot make those qualifying payments, delaying or even derailing their path to forgiveness.
Legal Allegations
The lawsuit asserts that the Department of Education acted unlawfully by removing IDR applications without proper authority or public notice. AFT contends that these actions violate federal statutes that guarantee borrowers access to income-based repayment options.
The union is seeking both declaratory relief—a formal court ruling affirming that the Education Department’s actions are unlawful—and injunctive relief, which would compel the agency to reinstate and maintain access to IDR plans.
“This is not just a technical glitch; this is a denial of a right that Congress gave borrowers,” AFT President Randi Weingarten said in a public statement. “Our members, and millions of other borrowers, have played by the rules and are being blocked from the programs that Congress created to help them.”
The Department of Education Responds
Following the lawsuit and growing public pressure, the Department of Education reopened applications for most IDR plans, including IBR (Income-Based Repayment), ICR (Income-Contingent Repayment), and PAYE (Pay As You Earn). However, the SAVE Plan—the most generous and widely publicized of the programs—remains unavailable for new enrollments.
Department officials have indicated that servicers are expected to resume processing of existing requests by mid-May 2025 and that borrowers will be transferred into their requested plans once systems are restored. The department maintains that its actions were necessary to comply with recent federal court rulings that temporarily blocked parts of the SAVE Plan.
Still, critics argue that the Education Department’s approach has been overly broad, effectively locking out borrowers from programs that were not directly implicated in the court orders.
Broader Implications
This lawsuit is not just about technical access to repayment plans—it is about the future of student loan forgiveness in America. IDR programs are one of the key mechanisms through which borrowers—especially teachers, nurses, nonprofit employees, and other public servants—can achieve eventual debt cancellation.
If the court sides with AFT, it could set a precedent that limits the Department of Education’s ability to suspend or alter repayment programs without going through formal rulemaking processes or providing notice to affected borrowers.
For public service employees, the outcome of this case may mean the difference between staying on track for PSLF or losing months, even years, of qualifying credit.
What Borrowers Should Do
For borrowers currently affected by the blocked plans, experts recommend:
- Monitoring the Case: Follow updates on AFT’s lawsuit and Education Department announcements regarding IDR plan availability.
- Documenting Payment History: Keep detailed records of communications with servicers, as well as payment confirmations, to ensure qualifying credits are restored if lost.
- Considering Temporary Forbearance: Some borrowers may be placed in processing forbearance while their IDR applications are pending, which may still count toward PSLF.
Financial aid professionals also urge borrowers to consult with loan servicers about any updates on eligibility for transfers into open plans like IBR or PAYE.
The Road Ahead
The case highlights the ongoing volatility in the student loan system. In the past several years, borrowers have faced payment pauses, multiple forgiveness programs, sweeping reforms, and numerous lawsuits challenging executive actions on debt relief.
AFT’s lawsuit signals that borrower advocacy groups are prepared to use litigation as a tool to hold the federal government accountable for ensuring that relief programs remain accessible.
As the legal battle continues, the decision could have far-reaching consequences for millions of borrowers counting on income-driven repayment to manage their debt—and for the future of federal student loan policy as a whole.
Stay informed on this critical legal battle impacting millions of borrowers. Follow JDJournal for real-time updates on the AFT lawsuit, student loan forgiveness developments, and your rights as a borrower.
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