The Department of Education will forgive 100 percent of all loan balances, refund prior loan payments, and repair credit histories for about 200,000 borrowers that attended certain for-profit schools.
We are getting closer to having student loan debt removed for all United States Student Loan Borrowers. Recently, the Department of Education agreed to settle a lawsuit brought against it regarding billions of dollars in debt forgiveness for hundreds of thousands of borrowers. This comes after three years of litigation. The United States Secretary of Education Miguel Cardona stated news of the settlement, saying, “We are pleased to have worked with plaintiffs to reach an agreement that will deliver billions of dollars of automatic relief to approximately 200,000 borrowers and that we believe will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties.”
The terms of the settlement for the case Sweet v. Cardona state that the Education Department will immediately approve borrower defense claims for approximately 200,000 borrowers, effectively canceling $6 billion in student loans for students that attended schools that the Department determined engaged in misconduct.
The settlement is divided into two groups: One class consists of about 200,000 borrowers who took out federal student loans to attend certain schools — the list includes over a dozen different for-profit institutions around the country. As part of the agreement, these borrowers will have their loans fully canceled, receive refunds for prior loan payments, and have their credit repaired. This is a huge victory for borrowers struggling with high gas prices, and groceries.
The second category consists of about 64,000 students that took out federal student loans but did not attend a school on the aforementioned list. These students will have their loan cancellation applications considered and get a decision based on how long their application has been pending.
Sweet v. Cardona was created by seven students against then-Secretary of Education Betsy Devos in 2019, previously titled Sweet v. Devos, and claimed their loan cancellation applications, which are known as borrower defense applications, were being ignored by the Education Department.
That’s because, in December 2019, the department started mailing denial notices to thousands of borrowers who had applied for loan cancellation. Attorneys handling the lawsuit argued the notices did not contain any real reason for denial.
Imagine if you were in this situation. Imagine if your application was denied and there was no accurate reason for the denial listed. How would you feel? Feel free to share your thoughts.