170,000 Borrowers to See Student Loan Debt Erased More than 170,000 borrowers will have their student loan debt canceled as part of a long-running class-action lawsuit that has led to the cancellation of over $23 billion in loans. The case, which began in 2019, centered on borrowers who claimed for-profit colleges misled or defrauded them, leaving them with unmanageable debt. The Biden administration reached a settlement in 2022, but the Trump administration delayed implementing relief, according to the Project on Predatory Student Lending (PPSL), which represented the plaintiffs. A federal appeals court rejected the Education Department’s attempt to extend the relief schedule by 18 months in July 2024, ensuring that approximately $11 billion in loans will be forgiven for the affected borrowers. The lawsuit, originally titled Sweet v. DeVos, involved borrowers who alleged that predatory schools provided "worthless products" that left them with thousands of dollars in debt, damaged credit, and limited access to further financial aid. The Education Department had begun ignoring borrower defense claims in 2017, reducing its capacity to process applications and diverting resources to undo prior administration work. Many borrowers faced prolonged delays, during which they struggled to secure employment, purchase homes, or qualify for new loans. One student’s debt ballooned from $250,000 to over $400,000 while waiting for her 2022 application to be resolved. The 2022 settlement, which has already provided $6 billion in relief to 300,000 borrowers, is now set to expand to an estimated 500,000 individuals.#education_department #project_on_predatory_student_lending #sweet_v_devos #borrower_defense_applications #federal_appellate_court
