Borrowers sue Department of Education over forgiven loans appearing on credit reports

The short version

• Student loan borrowers filed a proposed class-action lawsuit against the Department of Education for allegedly reporting forgiven debts as active.[CNBC]
• The suit represents individuals whose loans were discharged between April 2022 and January 2025 after attending misleading or fraudulent schools.[CNBC]
• Advocacy group PPSL estimates the agency wrongfully reports $4.6 billion in canceled debt across more than 300,000 borrowers.[Business Insider · CNBC]
• The Department of Education did not immediately provide a response or comment on the litigation.[CNBC]

Key facts

• Borrowers filed Woods v. U.S. Department of Education in the U.S. District Court for the District of Columbia.[CNBC]
• The proposed class action covers borrowers whose federal student debt was cleared between April 2022 and January 2025 after attending fraudulent or misleading colleges.[CNBC]
• Counsel from PPSL estimates the department is wrongfully reporting $4.6 billion in canceled debt for 300,000 student loan borrowers.[Business Insider]
• Named plaintiff Jorge Cortes had ITT Technical Institute loans forgiven in August 2022, yet a $21,586 balance remained on his credit report as of summer.[CNBC]
• Named plaintiff Mandy Woods qualified for relief from Ashford University loans but still shows an outstanding credit balance over $71,000.[Business Insider]

Sources

Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.

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