Ninth Circuit orders Education Department to forgive $11 billion in student loans for defrauded borrowers

A panel of the U.S. Ninth Circuit Court of Appeals ruled that the Education Department must cancel student loan debt for roughly 170,000 borrowers who were defrauded by for‑profit schools. The decision follows a 2022 settlement that required the department to clear loans for borrowers whose schools engaged in misconduct, with a deadline of early 2026 for any remaining claims. Because the department failed to act by that date, the court ordered the automatic approval of the additional claims, clearing about $11 billion in debt. The ruling expands the earlier forgiveness of loans for 300,000 borrowers, bringing the total number of debt‑relieved individuals to nearly 500,000 and the total debt erased to $34 billion. Education Department officials argued the settlement imposed an unrealistic deadline, but the court found the department must comply with the original order.