Student Borrowers Ask Court to Enforce $6 Billion Borrower Defense Settlement after Department of Education Breaches Agreement
Tens of thousands of student borrowers in the class action lawsuit Sweet v. Cardona are still waiting for settlement relief that was due by January 28, 2024
BOSTON – Today, student borrowers in the class action lawsuit Sweet v. Cardona filed a motion to enforce the $6 billion borrower defense settlement after the Department of Education violated the agreement by failing to meet the settlement deadline of January 28, 2024. Nearly 196,000 student borrowers were told by the Biden administration that their loans would be wiped away, their credit repaired, and money paid to the government on fraudulent loans returned. But as the deadline passed, about a third of these borrowers still had not had their loans cancelled. Missing the court-ordered deadline has caused hardship above and beyond what class members have already experienced.
The Department of Education has acknowledged that it breached the settlement agreement, but has refused to provide accurate updates or a timeline for when it will fulfill its legal obligation to class members. Borrowers are seeking court intervention to force the Department to comply.
The Department of Education has had a year to deliver settlement relief to 196,000 borrowers who are entitled to discharges, refunds, and credit repair under the settlement on the basis of the school that they attended. Now, more than 6 weeks after the deadline of January 28, 2024, tens of thousands of borrowers still have not received their settlement relief. Many of these borrowers filed their borrower defense applications as early as 2015 and have been waiting nearly ten years for the relief they are owed.
A letter sent to the Department in February by attorneys for the borrowers details the material breaches of the settlement agreement.
“This is an extraordinary failure by the Biden-Harris administration to comply with a settlement that impacts hundreds of thousands of people. Compliance is not optional, there are no excuses, and the administration needs to go to every length to ensure relief is delivered as promised and in accordance with this binding, court-ordered settlement agreement,” said Eileen Connor, President and Director of the Project on Predatory Student Lending. “This case exposed the government’s failure to protect students from predatory actors and its subsequent failure to recognize their legitimate right to loan cancellation. It’s unfathomable that the timelines in the settlement are casually disregarded, and that the administration has not come forward with any clear plan to make it right. We are asking the Department of Education to treat this settlement agreement with the urgency it requires — and the court to ensure that they do."
The filing includes affidavits and statements from class members stating the harm that has resulted from the ongoing settlement delays.
“I am waiting for this to be removed from my credit report so I can move forward with purchasing a home. I am forced to rent at a higher amount due to this continued reporting. It’s costly and impacts my family significantly” — Amy Sewell, NH, Argosy University
“I'm very disappointed in the way the DOE and EdFinancial have handled this settlement. It's been so frustrating not knowing what I should be doing and disheartening watching the interest I worked so hard to pay down continue to climb again. I know I'm entitled to this discharge but it really scares me that they'll drag their feet for so long it'll never happen and I'll end up right back where I started because of this interest.” — Julie Sams, OH, Art Institute
“MOHELA is still trying to collect payment on this loan and has removed me from forbearance three different times since I was notified of the discharge via Sweet v Cardona. This constant battle to keep this student loan disaster from damaging my credit rating is exhausting, and stressful. This is an approved borrower's defense discharge and needs to be discharged as soon as possible.” — Kat Bowers, IL, University of Phoenix
“I was denied a home loan in February 2024 because of this on my credit report and had to have a co-signer for my car loan. I am being denied improvements to my life.” — Laney Twehous, AR
This entire experience has been a complete nightmare. I'll never forget how I was told that my credits would transfer and I would receive a job upon graduation. When graduation came there was no job and the devastation sunk in when I tried to transfer credits and nothing was accepted.... anywhere. Now here I am 22 years later with this massive loan and I'm about to start paying for my daughters' school. Somehow I still received emails from Navient trying to convince me to refinance my loans. How can this be legal? My wife and I are in a constant state of anxiety over these loans. — Jorge Macias, TX
Additional statements submitted to the court can be viewed in the filing here.
For more details on the settlement, visit the FAQ on our website.
The borrowers are represented by the Project on Predatory Student Lending (PPSL) and Housing and Economic Rights Advocates (HERA).
About the Project on Predatory Student Lending
The Project on Predatory Student Lending (PPSL) is the leading legal organization representing student borrowers against predatory for-profit colleges and the policies that enable institutions to exploit and cheat students. PPSL uses bold, strategic litigation and advocacy to demand accountability in the higher education space and influence policy solutions to create a more just and affordable education system. PPSL represents more than one million student borrowers and its work has resulted in cancellation of more than $16 billion of fraudulent student loan debt.
About HERA
Housing and Economic Rights Advocates (HERA) is a California statewide, not-for-profit legal service and advocacy organization dedicated to helping Californians — particularly those most vulnerable — build a safe, sound financial future, free of discrimination and economic abuses, in all aspects of household financial concerns. It provides free legal services, consumer workshops, training for professionals and community organizing support, creates innovative solutions and engages in policy work locally, statewide and nationally.
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