Trump Administration Sued by Student Loan Borrowers Over Discharged Debt Credit Errors

A group of student loan borrowers has filed a high-profile class-action lawsuit against the Trump administration, alleging that improperly reported federal student debts are continuing to damage their credit scores years after being officially forgiven. The lawsuit, Woods v. U.S. Department of Education, was filed in the U.S. District Court for the District of Columbia. According to the complaint, the Department of Education has repeatedly failed to update credit reporting agencies like Equifax, Experian, and TransUnion regarding canceled debt balances. As a result, hundreds of thousands of borrowers are finding it difficult to secure auto loans, mortgages, rental apartments, or even job opportunities. Represented by The Project on Predatory Student Lending (PPSL), the proposed class-action focuses on individuals whose federal loans were cleared between April 2022 and January 2025 due to widespread fraud by predatory higher education institutions. PPSL estimates that false debt balances belonging to over 300,000 borrowers are still actively hurting consumer credit files nationwide. Legal advocates emphasized that despite meeting all government requirements to discharge their loans, borrowers are trapped in ongoing financial uncertainty. Among the plaintiffs is U.S. Marine veteran Jorge Cortes, who had his ITT Technical Institute loans discharged back in August 2022. Despite official confirmation, Cortes revealed that a balance exceeding $21,000 was still reflecting on his credit record as of this summer. The lawsuit seeks immediate corrective action to compel the Department of Education to wipe all erroneous loan balances from credit bureau databases. The Education Department has yet to issue an official statement regarding the ongoing legal proceedings.