"The AFT argues the department is delaying cancellation for many borrowers in a way that is "unwarranted and unlawful" and will have "real and significant consequences." That's because the clock is ticking. With the American Rescue Plan, Congress temporarily stopped treating loan cancellation as taxable income until Jan. 1, 2026. Soon, many borrowers will again be expected to pay taxes on those cancelled debts."
"The AFT is seeking an injunction to force the department to do a few things, including: Cancel the debts of borrowers on income-dependent repayment plans like IBR, ICR and PAYE when those borrowers have met the requirement that they be in repayment for 20 or 25 years. Process thousands of outstanding requests for Public Service Loan Forgiveness from borrowers who "buy back" time that did not previously count."
AFT filed for a federal injunction to force the Education Department to cancel loans for borrowers who have met longstanding forgiveness requirements and to process PSLF buyback requests. AFT says the department's delays are unlawful and will cause significant harm, especially because loan cancellations are temporarily excluded from taxable income only through Jan. 1, 2026. The injunction seeks cancellation for income-driven repayment borrowers after 20 or 25 years and resolution of outstanding Public Service Loan Forgiveness requests. The Education Department has cited legal uncertainty around the SAVE plan and court actions as justification for halting some cancellations.
Read at www.npr.org
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