Teachers Union Sues Education Secretary McMahon Over Stalled Loan Forgiveness for Public Servants

What happened

The American Federation of Teachers filed a class-action lawsuit in federal court in Washington, D.C., on Friday, October 30, 2026, against Education Secretary Linda McMahon and the Trump administration, alleging the Education Department unlawfully blocked Public Service Loan Forgiveness for qualified borrowers. Union leaders announced the suit at a press event in Boston, where named plaintiff Jennifer Jessel, who owes roughly $50,000 in student loans, described her own stalled paperwork: "But I can't [pay] because they won't process my paperwork," she said, according to WBUR News. The suit centers on the program's "buyback" option, which lets borrowers who have worked 10 years in public service make retroactive payments for months their loans sat in deferment or forbearance so those months count toward forgiveness. The union claims roughly 90,000 buyback applications are pending; WBUR puts the backlog at 88,000. Some borrowers have waited nearly two years for the Federal Student Aid office to process paperwork, and others have had months of already-earned credit toward cancellation erased, the reporting found. At the current processing rate, estimates suggest it could take two to three years to clear the backlog, and borrowers have no way to check the status of their requests. The buyback mechanism matters because borrowers in forbearance are not making qualifying payments at all: without retroactive credit, months that should count toward the 120-payment threshold simply do not accrue, which pushes the forgiveness date further into the future for people who believe they have already served the required decade.

Why it matters

Public Service Loan Forgiveness, created in 2007, cancels remaining federal student loan balances after 120 monthly payments while a borrower works in public service, typically a decade. Qualifying jobs include nurses, police officers and teachers, meaning the dispute touches workers in state and local government, hospitals and schools across the country, including Florida's large public-education workforce. About three-quarters of the AFT's nearly 2 million members are eligible for the program, according to a union spokesperson cited by The Seattle Times. The backlog of buyback applications nearly doubled between April 2025 and March 2026, a period that coincided with sharp staffing cuts at the Education Department; a federal watchdog found the department lost at least 40% of its workforce in the first three months of 2025. That combination, a swelling queue and a shrinking staff, is the factual core of the union's argument that the department is throttling a benefit Congress created rather than merely processing it slowly. For borrowers, the stakes are concrete: Jessel was on track to reach her 120 qualifying payments by June 2025, but the department placed her loans into involuntary forbearance in September 2024, forcing her into the buyback process, and she applied in July 2025 with no resolution since. AFT President Randi Weingarten framed the pattern as systemic: "I hear these stories all the time across America. People have done what they're supposed to do... They've actually filed all the paperwork and then they hear nothing," she said at the Boston event. The case also tests whether courts will require the department to process forgiveness claims on any set timeline, a question that affects tens of thousands of borrowers who say they have already earned cancellation.

How it is being covered

Ground.news counts 15 outlets carrying the story, with a left/centre/right split of 39/61/0 percent and high factuality ratings at 7 of 13 rated sources. No right-leaning outlets are covering the story, a blindspot on the right side of the spectrum, per Ground.news. Coverage so far leans on the union's filings and borrower accounts, with the department's response limited to a spokesperson's written defense.

What to watch

The Education Department's formal response in court will be the first marker, since a spokesperson defended the adjustments as corrections to "coding errors" from the previous administration intended to ensure accurate credit for qualifying payments, and the department did not respond to WBUR's request for comment. Watch whether the court certifies the class and whether any preliminary relief orders the department to resume processing buyback applications while the case proceeds. Congressional pressure is already building: Sens. Elizabeth Warren and Rep. Ayanna Pressley signed a June letter pressing the department to commit to a date for clearing the backlog, and additional hearings or letters could follow if the suit draws attention. Sen. Ed Markey, speaking at the Boston event, put the political framing sharply: "These are the people building a brighter future for students and communities and the Trump administration is treating their public service like a check it can cancel." Borrowers and unions will also be watching the backlog count itself, since the nearly doubled growth between April 2025 and March 2026 is the core factual dispute in the case, and any movement in the 88,000 to 90,000 pending applications would be the clearest sign of whether the department changes course before or after the court rules.

By the numbers

Source snapshot