Student loan forgiveness is moving forward for more than 170,000 additional borrowers after a federal appeals court rejected the Education Department’s latest attempt to delay relief. In its July 17 decision, the Ninth Circuit Court of Appeals upheld the deadlines established through the Sweet v. McMahon settlement. The Project on Predatory Student Lending now values the total settlement relief at no less than $23 billion.
The case began in 2019 when borrowers sued the Education Department over applications submitted through the borrower defense program. The federal program allows people to seek cancellation of federal loans when a school misled them or committed misconduct connected to their enrollment or loans. According to the official Sweet v. McMahon case timeline, some borrowers had been waiting for decisions since 2015 when the lawsuit challenged the agency’s failure to process their claims.
A federal judge granted final approval to the settlement on November 16, 2022. The deal divided affected borrowers into several groups and required the Education Department to provide decisions by enforceable deadlines. According to Higher Ed Dive, roughly 200,000 borrowers who attended one of 151 listed schools qualified for automatic relief. About 64,000 other class members received separate decision deadlines, while approximately 207,000 people became post class applicants after filing claims during the five month period before final approval. Student loan forgiveness became automatic for eligible applicants when the department missed those deadlines.
The allegations reach far beyond slow government paperwork. Gray News reported that dozens of schools were implicated in significant “institutional misconduct,” and many of those institutions have since closed. Borrowers said schools attracted them with promises of higher earnings, transferable credits and dependable careers that never materialized. PPSL identifies ITT Technical Institute, Corinthian Colleges, the University of Phoenix and the Art Institutes among the institutions attended by affected borrowers.
The latest court decision centered on the Education Department’s request to change deadlines it had previously accepted. The Ninth Circuit memorandum states that the department knew about approximately 179,000 post class applicants when it supported final approval in September 2022. The court also found that the agency knew by February 2023 that the group exceeded 205,000 people, yet it waited approximately three years before seeking relief from the agreement. The appeals court affirmed the lower court’s refusal to modify the settlement, allowing student loan forgiveness to continue under the existing terms.
For qualifying borrowers, the settlement offers more than a cleared loan balance. The signed settlement agreement defines full relief as the discharge of relevant federal loan debt, refunds of eligible payments made to the Education Department and deletion of the associated credit tradeline. The agreement also requires officials and loan servicers to remove qualifying debt from default status, erase interest that accumulated while covered claims were pending and complete any required refund process.
Timing remains the most important eligibility factor. According to Federal Student Aid, the settlement applies to people who submitted borrower defense applications on or before November 15, 2022. Borrowers who applied between June 23 and November 15, 2022 fall within the post class group. Those who did not receive decisions by their applicable deadlines became entitled to automatic relief under the agreement. People who applied later are not covered by this settlement, but they may still review the separate process through the official borrower defense portal. Student loan forgiveness through Sweet does not create a new application period.
Borrowers covered by the case should monitor their Federal Student Aid accounts, loan servicer records, email folders and credit reports for changes. Keeping copies of borrower defense applications, notices and payment records can help address missing relief. PPSL reported in June that more than 1,000 class members were still waiting for discharges, refunds or other benefits after earlier deadlines passed. The organization sent the Education Department and Justice Department a formal notice alleging a material breach, showing that the court victory does not erase the need for continued enforcement. For eligible families, this student loan forgiveness settlement can restore money, credit standing and financial breathing room that disappeared years ago.
