Was your student loan debt really forgiven? Why it might still be on your credit report.

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The Department of Education may still be reporting $4.6 billion in canceled student loan debt to credit bureaus, according to a proposed class action lawsuit.

The suit, filed last week by student borrowers alongside the Project on Predatory Student Lending (PPSL), alleges that the Education Department reported canceled debt as still outstanding to the three major credit bureaus.

The canceled debt belonged to student borrowers who were part of "group discharges" between April 2022 and January 2025. Their debt was discharged after the schools were found to have engaged in fraud or misconduct. According to the suit, the loans continued to appear on some borrowers' credit reports, with balances due and interest accruing.

The organization estimates that over 300,000 borrowers could be affected.

According to the PPSL, "Those inaccurate credit reports affect borrowers' ability to qualify for mortgages, rent homes, obtain auto loans and credit cards, secure employment, and build financial stability."

The Department of Education did not immediately respond to Yahoo Finance's request for comment.

For some student borrowers whose loans were discharged, the lawsuit claims the debt continued to appear on their credit reports as outstanding. Over time, the balances increased as they accrued interest.

Even after the affected borrowers disputed the information on their credit reports, they were unable to get the balances removed.

"The government cannot tell borrowers their loans are canceled, report those same loans as debts they still owe, and then ignore them when they try to correct the record," said Eileen Connor, president and executive director of PPSL. "These borrowers have done everything asked of them, but this false debt is still shaping where they can live, what they can borrow, and what their futures look like."

Mounting debt balances left unpaid can have lasting consequences for borrowers. The total amount of debt owed is a major credit-scoring factor, along with payment history. Not paying debt that's owed could result in it being reported as delinquent, which can negatively affect credit scores and remain on credit reports for years.

If your student loans were discharged between 2022 and 2025, it's worth checking your credit report to ensure the discharged loans aren't still appearing on your credit report.

Start by making sure your student loan servicer is correctly showing your discharged loans.

Log in to your online account with your federal student loan servicer to view information about your loans, including the loan status. If your loans have been discharged, your account should be showing a balance of $0.

Through AnnualCreditReport.com , you can request one credit report each week from each of the three major credit bureaus: Equifax, Experian, and TransUnion. These credit reports are free, and checking your own credit does not affect your credit score .

You should be able to view details about your student loans on your credit report, including the current balance, current status, and the date the status was last updated. You'll still find this information on your credit report, even after the account is closed.

However, if your loan has been discharged, your credit report should show the account status as closed and have no balance listed. If you're still seeing your full loan balance, it could be cause for concern. Just keep in mind that federal loans are reported to the bureaus once per month, so it can take some time after your discharge for the updated account status to appear.

If your credit report is still showing your discharged loan as due long after you've received notice that the account is closed by your loan servicer, you can file a dispute with the bureaus.

To dispute an error on your credit report , reach out to each of the credit bureaus. Each one ( Equifax , Experian , and TransUnion ) offers a way to submit your dispute online and track its status. It can be helpful to provide supporting documents, like the notice you received when your loans were discharged.

You can also reach out to your loan servicer directly for more information about the reported loan balance.

However, according to the lawsuit, unresolved disputes are also a major reason why the student borrowers and PPSL are pursuing legal action. According to the named plaintiffs in the lawsuit, the disputes they submitted about incorrect loan balances on their credit reports were dismissed after contacting their loan servicers and the credit bureaus, and the balances remained.

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