:max_bytes(150000):strip_icc()/GettyImages-2233039908-9aef8ac45ccd44b297ffed201f4970ed.jpg "This Group Is Challenging The Education Department’s Pause in Loan Forgiveness. What You Should Know")
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A group that has legally challenged the Department of Education in the past has filed a new complaint this week seeking a remedy for the thousands of borrowers waiting in limbo for their promised student loan forgiveness.
The American Federation of Teachers said in its Tuesday complaint that the department’s suspension of student loan forgiveness is unlawful. Since the beginning of 2025, some borrowers have completed the requirements for the time-based forgiveness, but the department has paused the discharge process.
What is time-based loan forgiveness? Income-driven plans are those in which payments are calculated based on a borrower’s income. Since payment amounts can change over time in an income-driven repayment plan, the loan is not scheduled to be paid off over a set number of years. Because of this, a borrower’s loan balance is forgiven if students make eligible payments for 20 or 25 years, depending on the plan.
Who is eligible for time-based forgiveness? There are four income-driven plans: Income-Based Repayment, Income-Contingent Repayment, Pay As You Earn, and Saving on a Valuable Education. On-time payments under any of these plans would count as eligible payments. However, court cases involving several different student loan provisions have led to the department pausing forgiveness processing on each plan.
Why has the department suspended forgiveness? The department says a ruling in a case about the legality of the Saving for a Valuable Education plan calls certain student loan forgiveness and what counts as eligible payments into question. The AFT argues that the department is misinterpreting the court’s ruling.
What’s next? The lawsuit asked that the department resume time-based loan forgiveness before Jan. 1, 2026.
This is the second complaint filed by the AFT against the Department of Education. In March, the department closed applications for all income-driven repayment plans, citing the same court injunction. The department eventually reopened applications after the AFT complaint was filed.
Later, the Department of Education stopped granting forgiveness for the Income-Contingent Repayment and Paying for a Valuable Education plans. In July, the department also announced that it would temporarily pause forgiveness for the Income-Based Repayment plan.
