Student loan relief expands for 170,000 borrowers via court ruling

A federal court ruling has expanded student loan debt relief for more than 170,000 borrowers through the Sweet v. McMahon settlement. This legal action addresses claims that certain schools misled students regarding graduation rates, job placement, or earning potential.

The ruling, which denies the Department of Education's request to extend the relief deadline, results in approximately $11 billion in loan balances being canceled. This is described as one of the largest settlements against the U.S. government in history. Relief is triggered for borrowers who applied for borrower defense forgiveness between June 23, 2022, and November 15, 2022.

Many eligible borrowers will not need to submit new applications, as the Department of Education plans to process the relief automatically and notify those affected directly. Officials expect the relief process to continue through June 2027 for those covered by the agreement.