US Education Department settles $23 billion debt relief for 450,000 borrowers

A federal settlement will erase the student‑loan debt of more than 450,000 borrowers, representing a total relief of over $23 billion. The class‑action suit, filed under the borrower‑defense rule, challenged the Department of Education’s refusal to process claims during the Trump and DeVos eras and was finally resolved after spanning three presidential administrations.

The agreement provides automatic loan forgiveness for borrowers who attended a list of more than 150 for‑profit colleges and allows an additional 250,000 borrowers to apply for relief during a limited post‑settlement window. The Project on Predatory Student Lending, led by executive director Eileen Connor, called the settlement the largest ever against the U.S. government.

The settlement requires the Education Department to complete the discharges and refunds, marking a significant financial and policy shift for federal student‑loan borrowers.