Teachers union sues US Education Department over halt to student loan repayment plans – The Times of India

The American Federation of Teachers (AFT) has filed a lawsuit against the US Department of Education, accusing it of unlawfully halting access to income-driven student loan repayment plans. The suit was filed in federal court in Washington on March 17, 2025, following the department’s decision to suspend borrowers’ ability to enroll in affordable repayment options. The move follows a federal appeals court ruling that blocked key elements of the Biden administration’s student debt relief program.
The AFT argues that the Department of Education’s actions are detrimental to millions of borrowers who rely on income-driven repayment plans. The union claims that the department’s suspension is an unnecessary freeze on the nation’s student loan system, effectively halting vital assistance for those struggling with student debt.
Legal challenge over repayment suspension
The lawsuit stems from a decision made by the US Court of Appeals for the 8th Circuit on February 18, 2025. The court ruled that the Biden administration lacked the authority to implement its Saving on a Valuable Education (SAVE) Plan, a new initiative designed to provide more generous terms for borrowers. Under the SAVE plan, some borrowers would pay as little as $0 per month, with some loans forgiven in as little as 10 years. However, the 8th Circuit’s decision, which came after President Biden left office, also blocked other income-driven repayment plans, complicating the Department of Education’s efforts to provide student debt relief.
The Education Department responded to the court’s ruling by instructing student loan servicers to stop processing applications for income-driven repayment plans. The department also removed the application form from its website. A spokesperson from the Department of Education stated that they were working to adjust the repayment programs in line with the court’s ruling and anticipated a revised form to be available by next week, as reported by the USA Today.
Union responds to the suspension
AFT President Randi Weingarten expressed strong disapproval of the department’s decision, calling it a harmful freeze on student loan programs. As quoted by the USA Today, she stated, “The department’s actions are effectively freezing the nation’s student loan system, denying borrowers the relief they desperately need.” Weingarten emphasized that the lawsuit seeks to protect borrowers’ rights to access income-driven repayment plans, which were not affected by the 8th Circuit’s ruling.
The lawsuit puts the Biden administration’s student debt relief plans back in the spotlight, amid ongoing debates about the future of US student loan programs and the role of federal agencies in regulating them.