450K borrowers say they were ripped off. Their student loans are being erased

The class-action lawsuit Sweet v. DeVos/Cardona/McMahon has spanned three presidential administrations and challenged the borrower defense rule that allows students to cancel federal loans if their schools lied about job prospects credit transferability or future earnings. In 2022 the Biden administration agreed to a settlement promising full and automatic loan relief for borrowers who attended more than 150 mostly for-profit colleges listed in the agreement. The settlement also opened a brief period for over 250,000 additional borrowers to apply for relief with the requirement that the Education Department review those claims within a set time or discharge the loans. By April 2024 the department had provided roughly $12 billion in loan discharges or refunds to nearly 300,000 borrowers and the total relief is expected to exceed $23 billion for over 450,000 people. A July 17 2024 ruling by the U.S. Court of Appeals for the 9th Circuit affirmed that the department must honor the settlement deadlines rejecting its request for an 18 month extension. Borrowers such as Jessica Feindt of Michigan have seen their loans erased after years of debt describing feelings of relief mixed with anger over the years their families suffered under the loans. Advocates compare the outcome to historic settlements against industries that sold toxic products noting that the Sweet settlement will be the largest ever against the U.S. government.

(Source：NPR)