For years, borrowers who said their schools tricked them have been waiting on the government. They asked to have their federal loans erased, and then they waited some more.
One borrower's debt grew from $250,000 to roughly $400,000 while the Education Department worked through her claim.
The case began in 2019, when The Project on Predatory Student Lending sued the Trump administration. The suit stretched across three presidential administrations, and its title changed with each new education secretary: Sweet v. DeVos, then Sweet v.
Cardona, and finally Sweet v. McMahon, named for Education Secretary Linda McMahon.
The borrowers said their schools made false promises about job stability, higher pay, and transferable credits.
According to Connor, the Education Department had "significant evidence of institutional misconduct" against the schools named in the Sweet settlement, which numbered in the dozens. Most were for-profit institutions that have since closed, though not all of them. Borrowers filed claims under Borrower Defense, a program that lets student borrowers who were misled have their federal loans forgiven.
Eileen Connor, who leads The Project on Predatory Student Lending, described what many of them went through. "Instead, many were left with enormous debts, credentials employers did not respect, credits that would not transfer, and, in some cases, no degree at all."
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Their federal debts kept some people from getting home loans or auto financing. Some also postponed starting a family or delayed medical care, Connor added. "Borrowers also described panic attacks, anxiety, depression and years of being unable to plan for the future," she said.
Court filings from April show the Trump administration asking for more time to determine eligibility for an "unexpectedly large" number of applicants and warning that relief could lead to a "substantial windfall at taxpayer expense." Connor said the ruling "makes clear that the federal government cannot simply disregard borrowers' rights and its own legal obligations without consequence."
On average, the settlement wiped out more than $48,000 in federal student debt per borrower. Many will also get a refund, typically over $15,000, if they made earlier payments.
Not every claim makes the cut. The settlement covers claims that were pending as of November 2022, plus certain applications that were denied between December 2019 and October 2020.
"Individual amounts vary significantly, however, and many borrowers received substantially more or less," Connor said.
People can also look up their Borrower Defense filing date at Studentaid.gov.
They are not required to make payments while they wait.
Connor said of the settlement: "It is not something one can newly qualify for today."
Mark Kantrowitz, a higher education expert, noted that the agreement applies solely to federal loans. "Private student loans do not qualify for Borrower Defense," Kantrowitz said.
Close to two dozen states have tuition-recovery fund programs for students who attended a for-profit school that closed.
Officials at the Education Department did not answer a request for comment.
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