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Posted on 08/01/2026 12:21:16 PM PDT by DFG
Hundreds of thousands of student loan borrowers have gotten their debts forgiven, or soon will, due to a $23 billion class-action settlement with the U.S. Department of Education.
The student loan borrower plaintiffs said that their schools significantly misled them and that the Trump administration delayed delivering the relief to which they were entitled under a protection known as Borrower Defense. That program allows defrauded federal student borrowers to get their debt excused.
In late July, a federal appeals court denied Trump officials’ latest request to postpone making a decision on a large swath of the applications, paving the way for another nearly 200,000 borrowers to get their student loans wiped. That brings the total number of borrowers to get their debts forgiven under the settlement to about 450,000.
The legal challenge played out over three presidential terms, its name changing from Sweet v. DeVos to Sweet v. Cardona to Sweet v. McMahon. One student loan borrower’s debt swelled to roughly $400,000 from $250,000 while she waited for the Education Department to decide on her Borrower Defense claim, said Eileen Connor, the president and director of The Project on Predatory Student Lending, an advocacy group. PPSL brought the lawsuit against the Trump administration in 2019.
“It makes clear that the federal government cannot simply disregard borrowers’ rights and its own legal obligations without consequence,” Connor said.
The Education Department did not respond to a request for comment.
In court documents from April, the Trump administration said it needed time to determine eligibility for relief among an “unexpectedly large” number of applicants that could lead to a “substantial windfall at taxpayer expense.”
What consequences did borrowers face?
Dozens of schools were implicated in the Sweet settlement “for which the Department had significant evidence of institutional misconduct,” Connor said. Many of the schools, but not all, were for-profit institutions that are now shuttered.
These colleges made false promises to student loan borrowers, including that their education would lead to stable careers, higher earnings and transferable credits, she said: “Instead, many were left with enormous debts, credentials employers did not respect, credits that would not transfer, and, in some cases, no degree at all.”
People were denied mortgages and car financing because of their federal debts. Others delayed starting a family or postponed medical care, Connor added.
“Borrowers also described panic attacks, anxiety, depression and years of being unable to plan for the future,” she said.
Who benefits from the settlement?
Eligibility for the Sweet settlement is based on what school a borrower attended and when they submitted their Borrower Defense application, Connor said. “It is not something one can newly qualify for today,” she said.
If you had a claim pending with the Education Department in Nov. 2022, you may be included in the settlement class. But the relief also reaches certain borrowers whose applications were denied between Dec. 2019 and Oct. 2020.
You should be able to check when your Borrower Defense application was submitted at Studentaid.gov. The Education Department also notifies eligible borrowers.
The settlement only impacts federal student loans, said higher education expert Mark Kantrowitz.
“Private student loans do not qualify for Borrower Defense,” Kantrowitz said — though nearly two dozen states maintain a tuition recovery funds program if you attended a for-profit school that closed.
How much will borrowers get in relief?
The average federal student loan balance cleared under the settlement exceeded $48,000, Connor said. “Individual amounts vary significantly, however, and many borrowers received substantially more or less,” she added.
Borrowers who were eligible for the settlement may also qualify for a refund for any previous payments made on their debt. The typical refund for borrowers eligible for one is over $15,000, Connor said.
When does the relief come?
The deadline for a borrower’s relief also depends on the details of their case and on when they applied for loan forgiveness, Connor said.
Under the terms of the settlement, the latest the Education Department can clear an eligible borrower’s debt is June 15, 2027, Connor said. You’re not required to make payments while you wait for the loan forgiveness.
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Thanks, Obama.
Ummm...
So, then:
Where are the prosecutions for the fraudsters?
[rhetorical]
This entire student loan fiasco has become a nightmare. The government should never have been involved. And the rules change every time the administration changes.
Sounds to me like many former college students, not just the ones who went to for profit ones.
Now if you want to say "Thanks Democrats" then you may be on to something.
I taught online for two such institutions before Obamacare rules made it impossible to adjunct in such places; this was alongside the regionally accredited colleges in my portfolio. I can say that all students got the same level of education from me, regional or national accreditation. What the for-profit students didn’t get was transferrable credits, but my students understood that and didn’t care, most of them wanted a degree in the field they were already working in.
If I borrow money from a bank, spend it on a scam, and win a law suit, am I off the hook for the loan?
How is the lender responsible?
“substantial windfall at taxpayer expense.”
Finally, a succinct explanation of what this is about. In essence, either the borrower pays, or the taxpayer pays. It is a zero-sum game. The usual shallow treatment by journalists fails to address this, and leaves some low-IQ readers assuming that the debt simply vanishes.
I have had clients with more than $750k in student loan debt, which was forgiven under the programs existing during the Biden Administration. Wonderful for the borrower; she had just paid 9% of her total debt over 10 years, then the remainder was laid to rest on the backs of the general revenue taxpayers of the United States.
The failed institution forgiveness might have some justification to it - but where is the responsibility of the borrower in using other people’s money to attend bogus or clearly failing schools?
The entire student loan universe needs re-engineering.
As I understand it education loans are not eligible for relief under bankruptcy laws like literally all other loans.
federal backing of said loan is irrelevant.
Student loans and grants should be based on future employment opportunities or worth to society.
Fund only percentages of the maximum loan total in the area of studies where to student will be able to pay it back.
Examples:
Engineering - 100%
Technology - 70%
Trades - electrical, welding, HVAC, etc. - 100%
Lawyers - (We’ve got plenty already) - 40%
Medical - 100%
Political Science - 10%
Sociology - 15%
Urban Studies - 5%
Afro American Studies - minus 20%
The colleges that don’t like it are the ones that have been robbing students and taxpayers for decades.
The failure of our K-12 education system to not educate these kids that THERE IS NO SUCH THING AS A FREE LUNCH. There is no such thing as Santa Claus. There is no Easter Bunny.
These kids were thus not qualified or ready for post high school education. It was fraud for them to apply to places for which they were not qualified.
EXACTLY!!!!
Go after ALL their assets...
Good, make the universities pay for their worthless degrees.
having the government guaranteeing students’ loans is the problem
back in the day, if you needed a student loan you went to a local bank and at least some of them were very happy to do it.....since the students would soon graduate and most of them would start working and...frankly were grateful that the bank backed them while in school
of course, most banks would not lend money if the schools were scams ...... I am speaking about legitmate schools
whether private or public, but still legit
Reagan was 100% right when he said Government is the problem.
Also in the old days colleges did not offer courses such as African studies. Most student borrowers studied something worthwhile and were able to pay the loan back.
The fraud isn't applying to skools for which they aren't qualified, the real fraud is being accepted knowing that Uncle Sugar was going to be there with a handful of money to pay for students that weren't qualified.
NOt fair at all. #1 My two kids paid every penney of their 5 figure loans back. #2 Lawyers get rich. #3 Taxpayers get f’d again. #4 Fraud by the Universities selling worthless diplomas for thousands more than they are worth SHOULD be who get’s stuck with the tab.
BEFORE ANY COLLEGE EVER SPOKE A SINGLE ONE OF THEM—THEIR PARENTS & PEERS HAD A LARGER HAND IN THE IDEA THAT COLLEGE WAS THE ONLY WAY TO HAVE A HUGE PAYCHECK.
CANNOT BLAME IT ALL ON THE COLLEGES.
THE GRADE SCHOOLS & HIGH SCHOOLS PASSED THEM FROM GRADE TO GRADE WHEN THEY COULD NOT READ/ WRITE OR DO MATH A 4TH GRADER SHOULD KNOW.
MAKING THE “COLLEGES” THE SCAPEGOAT ISN’T CORRECT.
THAT BASIC LACK OF EDUCATION IS FINALLY FINDING A ROOSTING SPOT WHEN THEY “BECOME EMPLOYED”.
SHOWING UP FOR A JOB INTERVIEW WITH YOUR MOTHER IS A DEFINITE RED FLAG.
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