Trump administration sued for ‘breaking the student loan system’

There are nearly 43 million federal student loan borrowers, with approximately $1.62 trillion outstanding in debt, the American Federation of Teachers said.

The American Federation of Teachers (AFT) is suing the United States Department of Education for violating federal law by denying borrowers access to affordable loan payments, the labor union announced on Wednesday.

The union, with 1.8 million members, said the Department of Education under President Donald Trump’s administration is “effectively breaking the student loan system” and blocking the progress made toward public service loan forgiveness, according to AFT’s news release.

“By effectively freezing the nation’s student loan system, the new administration seems intent on making life harder for working people, including for millions of borrowers who have taken on student debt so they can go to college,” AFT President Randi Weingarten said in the release. “The former president tried to fix the system for 45 million Americans, but the new president is breaking it again.”

Over the last couple of months, Trump has been clear about his intention to reduce the duties of the Department of Education. On March 11, the department laid off nearly 50% of its staff.

“A federal circuit court of appeals issued an injunction preventing the U.S. Department of Education from implementing the Biden Administration’s illegal SAVE Plan and parts of other income-driven repayment (IDR) plans,” a Department of Education spokesperson said in a statement to USA TODAY. “The Department is working to ensure these programs conform with the 8th Circuit’s ruling, and anticipates the revised form allowing borrowers to change repayment plans to be available as soon as next week.”

What is the AFT alleging the Department of Education, Trump did?

Concerns arose three weeks ago when federal education officials stopped access to income-driven repayment plans, an option that allows borrowers to make the loan payments they can afford, the labor union said. The union alleges that the officials removed the application form from the Department of Education’s website and are “secretly ordering” student loan servicers to cease all processing.

Without income-driven repayment plans, millions of borrowers will be affected as they can’t factor in their income and family size to their monthly loan payments, according to the union. Additionally, public service workers, including teachers, nurses, and first responders, will be affected because this plan is the only way they benefit from public service loan forgiveness, AFT said.

According to AFT’s complaint, there are nearly 43 million federal student loan borrowers, with approximately $1.62 trillion outstanding in debt.

“The AFT has fought tirelessly to make college more affordable by limiting student debt for public service workers and countless others—progress that’s now in jeopardy because of this illegal and immoral decision to deny borrowers their rights under the law,” Weingarten said. “Today, we’re suing to restore access to the statutory programs that are an anchor for so many, and that cannot be simply stripped away by executive fiat.”