[REVISION HISTORY]

US student loan settlement relief expands

Updated 2 times since CLSTR started tracking revisions of this situation.

What changed

2026-08-06 03:05 UTC → 2026-08-08 17:55 UTC · added ~~removed~~

In late July ~~2026~~ 2026, the Education Department announced a settlement to erase more than $23 billion in ~~student‑loan~~ student-loan debt for over 450,000 borrowers from predatory ~~for‑profit~~ for-profit colleges, with a limited window for an additional 250,000 applicants. The Ninth Circuit’s July 17 ruling rejected the department’s request to delay the settlement, automatically cancelling the loans for roughly 450,000 borrowers and expanding the ~~class‑action~~ class-action relief to about 500,000 borrowers. On 5 August ~~2026~~ 2026, the same court ordered the department to forgive an additional $11 billion for roughly 170,000 borrowers defrauded by ~~for‑profit~~ for-profit schools. On 6 August 2026, further details emerged regarding the Sweet v. McMahon settlement, which addresses claims that schools misled students about graduation rates, job placement, or earning potential. This ~~action brings~~ ruling denied the ~~total debt erased~~ Department of Education's request to ~~about $34~~ extend the relief deadline, resulting in the cancellation of approximately $11 billion in balances. The relief applies to 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 ~~number~~ Department of ~~borrowers receiving~~ Education plans to process the relief automatically and notify those affected directly. Officials expect the relief process to ~~nearly 500,000, completing~~ continue through June 2027 for those covered by the ~~court‑mandated settlement.~~ agreement.

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