For borrowers stuck with a canceled loan that still shows up as debt, the outcome of one pending federal case could matter quite a bit — though nothing has been decided yet.
What the lawsuit is asking for
Woods v. U.S. Department of Education, filed in the U.S. District Court for the District of Columbia, alleges that the Department kept reporting discharged loan balances to Equifax, Experian, and TransUnion as active — sometimes years after the loans were forgiven. The suit is seeking class-action status covering more than 300,000 borrowers whose loans were discharged between April 2022 and January 2025, arguing that the inaccurate reporting can block affected borrowers from mortgages, rental housing, auto loans, and jobs.
What could change if the case moves forward
If the plaintiffs succeed, the case could push for the Department to correct how these discharged balances are reported to the credit bureaus — addressing the exact problem described by named plaintiff Jorge Cortes, a Marine veteran whose ITT Technical Institute loans were forgiven in August 2022 but who still had a $21,586 balance on his credit report this summer. A successful class certification could also mean the outcome applies to the broader group of borrowers in the same situation, not just the individuals who filed suit.
What hasn’t changed yet
As of the report, the Department of Education had not responded to a request for comment, and the case’s outcome remains pending before the court. No ruling, settlement, or policy change has been announced.
What to keep in mind
Because this case is still working through the court, it’s worth checking back on its status before assuming anything has been resolved — for now, the reporting issue it describes appears to still be ongoing for affected borrowers.
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