300,000 student-loan borrowers got their debt wiped out — but their credit is still taking a hit, a new lawsuit says

A new lawsuit argues that the Department of Education continues to report student-loan borrowers' forgiven balances to credit bureaus. ferrantraite/Getty Images Student-loan borrowers who got debt relief are being wrongfully reported to credit bureaus, a new lawsuit says. The lawsuit estimated that around 300,000 borrowers who were defrauded by their schools are affected. Inaccurate reporting could harm a borrower's credit score and trigger wage and benefit garnishment. Student-loan borrowers whose debt was wiped out are still being reported to credit bureaus, a new lawsuit says. On Thursday, the Project on Predatory Student Lending, a borrower advocacy group, filed a lawsuit against the Department of Education. It said that the department is violating the Fair Credit Reporting Act by reporting outstanding balances on "cancelled and legally unenforceable debt."