A major national labor union and a group of student loan borrowers filed a new class action lawsuit against the Education Department on Friday, accusing the department of blocking Public Service Loan Forgiveness, a popular federal student loan forgiveness program that more than two million borrowers are actively pursuing. The department and U.S. Secretary of Education Linda McMahon are systematically stalling or denying relief for borrowers who otherwise should qualify to get their student loans discharged under the program, the suit says, effectively trapping them in debt indefinitely.

“Secretary McMahon has flagrantly ignored her responsibility to help teachers, nurses and first responders under the buyback provision her department pledged to implement,” said Randi Weingarten, President of the American Federation of Teachers, one of the lead Plaintiffs in the new lawsuit, in a statement on Friday announcing the legal challenge. “Instead of processing applications in good faith, she has left 90,000 dedicated public employees in the lurch, forcing them further into debt while their applications gather dust. This lawsuit demands that McMahon stop stalling and do her job–to help, rather than hurt, the people she is sworn to serve.”

Public Service Loan Forgiveness, or PSLF, is supposed to reward borrowers who commit to working in lower-paying jobs for nonprofit or public organizations while making regular payments on their student loans. Borrowers are entitled to have any remaining balance on their loans forgiven after 10 years of making qualifying payments while working in eligible employment. A separate and related program, called PSLF Buyback, gives borrowers the opportunity to pay for certain past periods of non-payment (like a deferment or forbearance), based on what they would have paid if they had been in regular repayment during that time.

But in recent months, both PSLF and PSLF Buyback have essentially become nonfunctional. Processing delays, backlogs, and rollbacks of PSLF credit have ground student loan forgiveness under the programs to a halt. The new lawsuit argues that the Education Department’s actions are illegal, and asks the court to order the department to comply with the law.

Lawsuit........

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