PSLF Lawsuit Targets Forgiveness Delays as First SAVE Deadline Passes

The American Federation of Teachers (AFT) has filed a class action lawsuit accusing the US Department of Education of unlawfully blocking Public Service Loan Forgiveness (PSLF) for tens of thousands of borrowers, as the first group of borrowers passed their final deadline to leave the SAVE repayment plan. The two developments mean a busy and uncertain November for millions of federal student loan borrowers.

The lawsuit, Weingarten v. McMahon, was filed on Friday 30 October in the US District Court for the District of Columbia. AFT President Randi Weingarten is the lead plaintiff, and the case names Education Secretary Linda McMahon.

What Does the PSLF Lawsuit Claim?

PSLF, signed into law by President George W. Bush in 2007, allows qualifying government and non-profit workers to have their remaining federal student loans cancelled after 120 qualifying monthly payments. The suit focuses on the PSLF buyback programme, which lets borrowers who have reached 120 months of qualifying employment pay retroactively for months spent in forbearance or deferment.

According to CNBC, a court filing showed that about 88,000 borrowers were still waiting for a buyback decision as of the spring. The AFT says the figure is now above 90,000. The plaintiffs also allege that the department lowered borrowers’ qualifying payment counts without explanation earlier this year, pushing back their forgiveness dates. The suit asks the court to order the department to process buybacks, restore credit and forgive eligible loans; it does not seek monetary damages, according to the AFT.

“Secretary McMahon has flagrantly ignored her responsibility to help teachers, nurses and first responders,” Weingarten said. Co-plaintiff Elizabeth Schoepflin, a speech-language pathologist from New York, said: “The Department of Education has ripped away the loan forgiveness credit I earned without any explanation. Every month this drags on is another payment I shouldn’t have to make.”

How Has the Education Department Responded?

A department spokesperson told CNBC that it was correcting “coding errors” made under the Biden administration. “These errors resulted in inaccurate payment counts for some borrowers,” the spokesperson said. “The Department remains committed to ensuring that every qualifying payment is properly credited to a borrower’s account.” Business Insider reported that the department also dismissed the lawsuit as “election-year theatrics”.

Business Insider also highlighted the case of a retired public-sector worker who received a forgiveness notice, retired, and then saw qualifying payments rescinded. Such cases are at the heart of the suit, which argues the problem could affect “thousands, if not tens of thousands” of borrowers. The case follows the department’s recent decision to drop appeals over the PSLF employer rule.

What Happened to the SAVE Plan Deadline?

Separately, the first group of borrowers still enrolled in the Biden-era SAVE plan reached their final deadline to choose a new repayment plan on 29 October. SAVE is being closed after legal challenges, and the department began sending 90-day notices from July, followed by a final 30-day notice. Borrowers who miss their deadline are moved automatically to a Standard or Tiered Standard plan, which can mean higher monthly payments.

According to Federal Student Aid, nearly 2 million of about 7.5 million SAVE borrowers have already chosen a new plan. Notices are being sent in waves, so other groups have later deadlines, with the final ones expected around March or April 2027. Our earlier guide explains what SAVE borrowers must do now.

What Should Borrowers Do Now?

• Check your notices. Log in to StudentAid.gov and your servicer’s website to see whether you have received a 90-day or final notice and what your deadline is.
• Pick a plan before the deadline. Most borrowers can choose Income-Based Repayment (IBR) or the new Repayment Assistance Plan (RAP). Our comparison of RAP vs IBR explains the differences.
• If you missed the deadline, act anyway. Being placed on a Standard plan does not stop you from applying for an income-driven plan later.
• PSLF borrowers should keep records. Download your PSLF payment count and employment certification history now, so you can show any changes later.
• Watch for scams. You never need to pay a company to change your repayment plan or apply for PSLF.

What Happens Next in the Lawsuit?

The case is at an early stage, and a ruling could take months. Because it is brought as a proposed class action, any eventual relief could apply to all similarly situated borrowers, not only the named plaintiffs, if the court certifies the class. Those behind on payments should also be aware that wage garnishment for defaulted loans could return in 2027.

Featured image: Entrance to the US Department of Education’s Lyndon Baines Johnson building in Washington, DC, by G. Edward Johnson / Wikimedia Commons, CC BY 4.0. File photo.

Sources

• CNBC — Class action lawsuit blames Trump officials for student loan forgiveness delays (30 October 2026).
• American Federation of Teachers — Weingarten v. McMahon: Major Class Action Lawsuit Launched Against Education Secretary (30 October 2026).
• Business Insider — Retired student-loan borrower’s PSLF payments and the new lawsuit (1 November 2026).
• Federal Student Aid — SAVE plan updates (2026).
• ACA International — First Group of Borrowers Passes Final Deadline to Leave SAVE Plan (October 2026).