<\/p>\n
A 2026 update to the $23 billion borrower defense class action case, Sweet v. McMahon, allows an additional 170,000 student loan borrowers to have their debt forgiven.<\/p>\n
MarioGuti\/Getty Images<\/p>\n
Roughly seven years after plaintiffs filed a massive class action lawsuit against the U.S. Department of Education (DOE), more than 170,000 additional borrowers will have their student loans forgiven. This follows several people’s allegations that their applications for loan cancellation were ignored after a settlement agreement.<\/p>\n
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Is there a class action lawsuit against the U.S. Department of Education?<\/p>\n
Yes. Seven plaintiffs filed a complaint on June 25, 2019, in the United States District Court for the Northern District of California on behalf of themselves and all federal student loan borrowers, according to the Project on Predatory Student Lending (PPSL<\/a>), a nonprofit legal services organization representing the class members.\u00a0<\/p>\n Article continues below this ad<\/p>\n In the complaint<\/a>, plaintiffs alleged that more than 160,000 former for-profit college students had submitted applications to cancel their federal student loans under the borrower defense based on their school\u2019s misconduct, but the DOE had “not granted or denied” any of them since June 2018 and had no timeline for reviewing them. Plaintiffs also alleged that the department\u2019s refusal to decide borrower defenses is unlawful. Learn more about borrower defense by clicking here<\/a>.<\/p>\n The court granted final approval<\/a> of the settlement in 2022, and the DOE agreed, per the PPSL, “to immediately cancel federal student loans for approximately 200,000 borrowers who attended schools found to have strong indicators of substantial misconduct, and to resolve all remaining class members’ borrower defense applications by a series of court-enforceable deadlines.” Still, over the next several years, the DOE attempted to delay its decision deadlines for Post-Class applicants, including by filing appeals.<\/p>\n The most recent development in late July 2026 “upholds the right to full settlement relief for all Post-Class applicants who did not receive a decision by various deadlines” listed on the PPSL website<\/a>.<\/p>\n Article continues below this ad<\/p>\n Post-Class applicants<\/a> are defined as\u00a0student loan borrowers “who submitted borrower defense to repayment (BD) applications between June 23 and November 15, 2022.”<\/p>\n What is Sweet v. McMahon (formerly Sweet\u00a0v. Cardona and Sweet v. DeVos)\u00a0<\/p>\n In the 2019 lawsuit, plaintiffs cited an alleged 2017 DOE statement that it was “taking a short pause to re-evaluate the prior administration’s actions.” Plaintiffs further alleged that the department “diverted its increasingly limited resources to undo all of the prior administration\u2019s work,” among other grievances.<\/p>\n Article continues below this ad<\/p>\n Some for-profit colleges named in the lawsuit were ITT Technical Institute (ITT), Corinthian Colleges (Corinthian), DeVry University, and the Art Institutes. The complaint alleges that these schools and others “promised high-paying jobs, state-of-the-art vocational training, and long and fulfilling careers.”\u00a0<\/p>\n \u00a0“The schools actually delivered worthless products that left students with thousands of dollars in debt, damaged credit, and depleted access to further student aid,” the complaint reads.<\/p>\n Student loan forgiveness 2026<\/p>\n In a July 23, 2026, press release<\/a>, the PPSL said a federal appeals court rejected the DOE’s latest attempt to “delay a decision deadline” for Sweet Post-Class applicants. The decision “triggered automatic relief for more than 170,000 additional borrowers targeted by predatory schools” and brings the Sweet v. McMahon settlement amount to $23 billion.\u00a0<\/p>\n Article continues below this ad<\/p>\n Circuit judges Kim McLane Wardlaw, John B. Owens, and Daniel A. Bress said in a memorandum<\/a> explaining its denial that the DOE “knew that there were approximately 179,000 Post-Class applicants when it jointly moved with plaintiffs for final approval of the settlement in September 2022, and it knew the total number of Post-Class applicants at the time the district court entered final judgment in November 2022.”<\/p>\n “At minimum, as we observed in our order denying the DOE\u2019s stay motion, the DOE knew by February 2023 that the Post-Class Applicants totaled over 205,000 people,” the judges said. “Yet the agency did not object to any aspect of this order until its first Rule 60(b) motion approximately three years later.”<\/p>\n Who qualifies for Sweet v. McMahon (formerly Sweet\u00a0v. Cardona and Sweet v. DeVos)\u00a0<\/p>\n According to the settlement<\/a> and PPSL website<\/a>, the settlement class is defined as \u201call individuals who had a borrower defense application pending as of June 22, 2022.\u201d\u00a0<\/p>\n Article continues below this ad<\/p>\n What to do if you qualify for Sweet v. McMahon<\/p>\n Post-Class applicants will receive full settlement relief by June 15, 2027, per the PPSL<\/a>.<\/p>\n Which student loans are going to be forgiven?<\/p>\n The DOE settled with borrowers in 2022, agreeing to immediately cancel the federal student loans of approximately 200,000 borrowers “who attended schools found to have strong indicators of substantial misconduct, and to resolve all remaining class members’ borrower defense applications by a series of court-enforceable deadlines.” The full list of schools is available here<\/a>.<\/p>\n Article continues below this ad<\/p>\n That agreement also “established decision deadlines for borrowers who applied for borrower defense between June 23, 2022, and November 16, 2022 (known as the Post-Class)” and ordered the DOE to “provide full settlement relief if it failed to issue decisions on time,” per the PPSL<\/a>.<\/p>\n Since the settlement was approved, the Department of Education\u00a0has repeatedly sought to delay those deadlines through motions and appeals, while several for-profit schools unsuccessfully challenged the settlement in court. Courts at every level \u2014 including the Supreme Court \u2014 rejected those efforts.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"A 2026 update to the $23 billion borrower defense class action case, Sweet v. 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