Student Loan Borrowers Win ruling Forcing Faster Forgiveness Processing
WASHINGTON, DC – JUNE 30: Student loan forgiveness activists participate in a rally at the U.S. Supreme Court on June 30, 2023 in Washington, DC. (Photo by Kevin Dietsch/Getty Images)
Student loan borrowers scored a victory on Thursday after a federal judge rejected a request by the Education Department to delay student loan forgiveness processing for more than 200,000 borrowers. The department had argued that it did not have sufficient resources to evaluate the discharge requests for federal student loans in the Sweet v. Cardona case (a class action lawsuit brought by borrowers against the first Trump governance over stalled or rejected Borrower Defence to Repayment applications) by a looming January deadline.
“The Court sent a clear message today: borrowers deserve fair, timely decisions, not years of uncertainty,” said Eileen Connor, President and Executive Director of the Project on predatory Student Lending, or PPSL, the legal organization representing student loan borrowers in the case, in a statement on Thursday. “This is a critical victory for people who have waited far too long for justice and relief, but this case isn’t over. we will continue to fight and stand with our clients until every single class member gets the relief they are legally entitled to under the court-binding settlement agreement.”
Here’s what the latest court ruling means for borrowers pursuing student loan forgiveness under the Sweet settlement.
Sweet Settlement Requires Student Loan Forgiveness Processing By The End Of January
the purpose of the Sweet settlement, which was implemented under the Biden-Harris administration and was intended to bind the Department of Education regardless of the outcome of subsequent presidential elections, was to resolve claims that the department under the first Trump administration had unlawfully blocked borrowers from receiving student loan forgiveness through the Borrower Defense to Repayment program. Borrower Defense to Repayment offers student loan borrowers the chance to request a discharge of thier student loans if their school engaged in certain kinds of misconduct, such as lying or deceiving prospective students about career or earnings prospects, admissions selectivity, the transferability of credits to other educational institutions, or the costs of the degree or certificate program.
Student loan borrowers had brought a class action lawsuit against the first Trump administration, arguing that the Education Department under former Secretary of Education Betsy DeVos had delayed processing Borrower Defense applications, in some cases for years. The class of former students also argued that the department had arbitrarily denied relief to other borrowers after conducting little or no meaningful review of their claims.
After several years of legal wrangling, the challenge finally was resolved under the Biden-Harris administration. The Education Department entered into the binding Sweet settlement in 2022. Under the terms of that settlement agreement, the department agreed to discharge the federal student loans for borrowers who had attended certain institutions and had submitted Borrower Defense applications by June 2022. Another group of borrowers,referred to
yes,according to the text,the January 2026 deadline was indeed the one the Department of Education sought to delay for post-class applicants in its court filing last month.
Specifically, the department argued it needed more time (an 18-month delay) to review the 200,000 remaining Borrower Defense applications and meet the original January 28, 2026 deadline. However, the court ultimately rejected this request and reaffirmed the January 28, 2026 deadline, with a further requirement to complete processing by April 15, 2026.