UPDATE: Schools Continue to Delay Approved Settlement Relief for Student Borrowers
At status conference in Sweet v. Cardona, Judge Alsup scheduled a hearing on motion to stay settlement relief for February 15, 2023
SAN FRANCISCO – At a status conference today in the class action lawsuit Sweet v. Cardona, Judge William Alsup addressed the schedule for the motion to stay settlement relief pending appeals of the landmark borrower defense settlement, setting a hearing date on the motion for February 15, 2023.
Judge Alsup did not alter the date that the settlement will go into effect, which is currently Saturday, January 28, 2023, but loan discharges for the automatic relief group under the settlement will not be processed before the hearing on February 15. The Department of Education will take other steps toward settlement implementation over the next two weeks.
Statement from Eileen Connor, President and Director of the Project on Predatory Student Lending:
“Our clients are legally entitled to relief and every day that they are forced to wait puts a strain on their lives. Desperate action by three schools does not change the facts of this settlement and the merits of its approval, which will provide justice for over 264,000 defrauded borrowers. We are confident the facts will prevail and that relief for our clients is imminent.”
Today’s status conference follows the notices of appeal filed on January 13, 2023 by three schools (Lincoln Educational Services Corporation, American National University, and Everglades College, Inc.) who are attempting to block the settlement, which won final approval on November 16, 2022 and would cancel at least $6 billion in student loans for approximately 200,000 individuals with pending borrower defense applications. The appeals themselves were not addressed in today’s status conference and will move forward on a separate schedule from the motion to stay.
Sweet v. Cardona (previously Sweet v. DeVos) was filed in the United States District Court for the Northern District of California in 2019 by seven named plaintiffs, on behalf of themselves and all federal student loan borrowers whose borrower defense claims for loan cancellation were being ignored by the Department of Education. The plaintiff class includes approximately 264,000 class members who make up the current borrower defense backlog.
The borrowers are represented by the Project on Predatory Student Lending (PPSL) and Housing and Economic Rights Advocates (HERA).
For more details on the settlement, visit the FAQ on our website.
About the Project on Predatory Student Lending
Established in 2012, the Project on Predatory Student Lending represents over a million former students of predatory for-profit colleges. Its mission is to use litigation to eliminate predatory practices in higher education, and to relieve current and future borrowers from fraudulent student loan debt. PPSL has won landmark cases to protect borrower rights, recover money owed, and cancel more than $10 billion in fraudulent debt. Its ongoing cases hold predatory colleges accountable and force the U.S. Department of Education to act on behalf of students and stop protecting this insidious industry.
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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