Students sue Education Dept., claiming it reported $4.6B in canceled loans as debt
A group of defrauded students says the Education Department continued to report their student loans as active to credit bureaus, years after canceling the debt.
The lawsuit, filed in the U.S. District Court for the District of Columbia Thursday, estimates that more than 300,000 people with a total of $4.6 billion in forgiven student loans have been affected.
Between April 2022 and January 2025, the Education Department canceled $23.4 billion in outstanding debt for 1.5 million borrowers defrauded by their for-profit colleges. The accounts were supposed to appear as closed on their credit reports, but some borrowers noticed the balance never went away, and in some cases grew as interest continued to accrue, according to the complaint.
