Borrowers Sue Education Department Over Canceled Student Debt Still on Credit Reports

Yahoo Finance··US·Read original
2▲0 ▼3Impact / 5
Summary · why it matters

Two student loan borrowers have sued the U.S. Department of Education, alleging that federal loans the department canceled continue to appear as outstanding debt on their credit reports. The proposed class-action lawsuit was filed Thursday in the U.S. District Court for the District of Columbia and seeks damages under the Fair Credit Reporting Act, with the borrowers claiming the department still reports the canceled loans to Equifax, Experian, and TransUnion, according to case materials from the Project on Predatory Student Lending. PPSL noted that from April 2022 through January 2025, the Department of Education announced final group discharges covering more than 1.5 million borrowers and $23.4 billion in federal student loans tied to schools where the department found widespread fraud and misconduct, and it estimates that $4.6 billion of that canceled debt is still being reported to credit bureaus, affecting more than 300,000 people. Mandy Woods, who borrowed about $65,000 to attend Ashford University, said her credit reports showed a $71,901 balance as of August 2026, while Jorge Cortes, a Marine Corps veteran who borrowed to attend ITT Technical Institute, said his reports still showed a $21,586 balance in August 2026 despite his loans being included in the department's August 2022 group discharge. The lawsuit says the FCRA requires companies that furnish information to credit bureaus to investigate disputed information and correct or delete information that is inaccurate, incomplete, or cannot be verified, and the Department of Education did not immediately respond to a request for comment.

Impact on assets 4

Cybersecurity & Digital Trust▼ · 2 stocks
Equifax Inc
EFX
▼ NegativeRegulationrelevance

Sued class action alleges Equifax still reports canceled federal student loans as outstanding, violating the Fair Credit Reporting Act.

TransUnion
TRU
▼ NegativeRegulationrelevance

Named in the FCRA class action for continuing to report canceled Department of Education student loans as outstanding debt.

Cloud & Digital Infrastructure▼ · 1 stocks
Experian PLC
EXPN
▼ NegativeRegulationrelevance

Named in the FCRA class action for continuing to report canceled Department of Education student loans as outstanding debt.

Financials▲ · 1 stocks
© 2026 MarketIVNews