A federal court approved a settlement between the Department of Education and around 200,000 student loan borrowers on Wednesday for $6 billion in loan relief, as the borrowers argued the department was taking too long to process applications claiming the borrowers were defrauded by their colleges, The Hill reported. Federal Judge William Alsup gave a final ruling in the Sweet v. Cardona case, formerly called the Sweet v. DeVos case because the lawsuit was brought during the Trump administration. The borrowers, represented by the Project on Predatory Student Lending (PPSL) and Housing and Economic Rights Advocates, filed the lawsuit back in 2019 in the U.S. District Court for the Northern District of California. The lawsuit was filed as the borrowers argued that their applications for the borrower defense program were not getting addressed by the Department of Education. Borrower defense applications are intended for borrowers who believe they have been defrauded by their schools and are looking for a partial or full discharge of the federal student loan debt they have. Judge Alsup said in his decision that the “program set up by Congress has devolved into an impossible quagmire,” pointing out that it would take the Education Department more than 25 years to get through backlogged applications if they had all their borrower defense employees working a full work week with no holidays all year long. The settlement on Wednesday includes a full discharge of loans, refunds and credit repairs for around 200,000 borrowers with borrower defense applications who went to certain schools. Around 64,000 borrowers who did not attend the agreed-upon schools have to have their applications processed within a certain time frame, or they will get automatic relief as well.
