A July 17 Ninth Circuit ruling left settlement deadlines in place, triggering full relief for more than 170,000 additional Borrower Defense applicants and bringing total secured relief to over 500,000 borrowers.
About 450,000 federal student loan borrowers who said their schools misled or defrauded them are receiving debt relief through the Sweet v. McMahon settlement, a years-long class action centered on the Borrower Defense to repayment program. The case, previously known as Sweet v. DeVos and Sweet v. Cardona, challenged the Education Department’s handling of claims from borrowers who accused colleges of misconduct such as misstating job placement rates, expected salaries, program costs, accreditation or whether credits would transfer. A 2022 settlement required the department to process long-stalled applications on court-ordered deadlines. On July 17, a unanimous three-judge panel of the U.S. Court of Appeals for the Ninth Circuit rejected the department’s bid for more time to review claims from post-class borrowers, leaving prior deadlines intact and triggering full settlement relief for more than 170,000 additional borrowers whose applications were not decided on time. Altogether, the settlement has provided or secured an estimated $23 billion in relief for more than 500,000 borrowers, according to the Project on Predatory Student Lending. Qualifying relief can include cancellation of federal loans tied to the school, refunds of certain payments and credit report corrections. The settlement applies only to defined groups of borrowers whose applications were included in the litigation and deadlines, and borrowers do not need to pay outside companies to obtain the relief.