Student Loan Debt to Be Erased for Tens of Thousands—Here's Who Is Eligible
Summary
More than 170,000 federal student loan borrowers who say their schools misled them will have their debts erased after a court rejected the Education Department's effort to delay relief. This ruling is part of a class-action case called Sweet v. McMahon that protects borrowers from school misconduct like false job prospects or misleading costs.Key Facts
- Over 170,000 borrowers will get their federal student loans canceled due to proven school misconduct.
- The case, Sweet v. McMahon, covers students misled about job prospects, earnings, accreditation, or program costs.
- The Education Department had previously discharged $17.2 billion in loans for 974,820 borrowers under borrower defense claims.
- The total relief in this settlement now reaches at least $23 billion.
- Borrower defense to repayment allows loan cancellation when schools engage in harmful misconduct related to education or loans.
- The original lawsuit began in 2019, challenging delays and denials by the Education Department of borrower defense claims.
- Settlement agreements in 2022 set deadlines for who qualifies as class members and post-class applicants for relief.
- Many affected schools were found to inflate tuition costs and give false promises while collecting federal loan money.
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