Canceled Student Loans Are Still Showing Up as Debt, Lawsuit Says

Investopedia Markets News (all except PF) · Sep 24, 2026

Borrowers sued Secretary Linda McMahon’s Department of Education on Thursday for failing to properly cancel their student debt.Credit: Will Oliver/EPA/Bloomberg via Getty ImagesKEY TAKEAWAYSThe Department of Education allegedly reported $4.6 billion in canceled student debt as overdue loans, impacting over 300,000 borrowers, advocates say.A class action lawsuit claims borrowers with forgiven loans are still being reported as delinquent, harming their credit and risking wage garnishments.The Department of Education is allegedly reporting canceled federal student debt as still due, and two…