A major teachers’ union is suing to force the Trump administration to revive low-cost student loan repayment and forgiveness programs. The American Federation of Teachers (AFT) filed the motion in federal court, claiming that the Department of Education is required to offer income-driven repayment (IDR) plans, which help borrowers pay according to income and qualify for loan forgiveness.
The issue began when the Trump administration instructed loan servicers to stop processing IDR applications and removed application forms. The move was in response to a court ruling that reversed the Biden-era SAVE plan, but it impacted other repayment plans indirectly targeted by the decision. Borrowers couldn’t enroll, switch plans, or recalculate their payments as a result. Many were left with greater-than-anticipated monthly payments.
The AFT’s lawsuit cites real problems, such as educators and public servants on the verge of loan forgiveness who cannot proceed because their applications were blocked. Some borrowers have had their payments increase to unrealistic amounts, and others fear defaulting on their loans.
In response, the Trump administration announced that it would reinstate IDR applications by March 26, although they will not begin to process them, leaving many of the borrowers financially uncertain. The next legal hearing is April 17, with the fate of loan repayment programs hanging in the balance.
By Editor-in-Chief Timothy Gocklin, MBA, MSF
