The American Federation of Teachers (AFT) has just filed a new lawsuit, asking a federal judge to force Trump’s U.S. Department of Education to get its act together and cancel the debts of borrowers who have met the longstanding requirements for loan forgiveness. This is big news, and it’s a direct challenge to Education Secretary Linda McMahon, with the AFT arguing that the department is delaying cancellation in a way that is “unwarranted and unlawful” and will have “real and significant consequences”.
The clock is ticking for many borrowers. With the American Rescue Plan, Congress temporarily stopped treating loan cancellation as taxable income until January 1, 2026. After that, a bunch of people are going to be expected to pay taxes on those canceled debts, and the Education Department’s delays are only making things worse. The AFT is trying to get an injunction to force the department to do a couple of important things.
