Overview
- A Ninth Circuit panel refused the department’s request to postpone the 2022 Sweet settlement schedule, which by its terms triggers automatic approval for claims the agency did not decide on time.
- Roughly 170,000 borrowers stand to have about $11 billion in federal student loans canceled under the court-enforced clause, adding to earlier relief that brings the case to about 500,000 people and roughly $23 billion in total forgiveness.
- The 2022 settlement required the Education Department to keep reviewing late-filed borrower-defense claims and said missed deadlines would lead to automatic relief; the settlement also sets a final implementation deadline of June 15, 2027.
- Borrowers do not have to make loan payments while they await forgiveness and eligible relief can include canceled balances, corrected credit reports, and refunds of payments already made.
- Advocates say the ruling enforces borrowers’ rights after years of backlog and delays and could force faster agency action and large fiscal transfers, while the Education Department has said the timetable is unrealistic and the Project on Predatory Student Lending has alleged a material breach.