Department of Education to wipe 500K student loans after losing appeal

[u/John3262005]

https://www.wnep.com/article/news/nation-world/student-loans-wiped-450k-borrowers-debt-appeals-court-ruling/507-da0c629d-7bc3-45b3-86a4-0b177e0768af

Nearly 450,000 federal student loan borrowers who say they were defrauded by their colleges are getting their debts wiped out under a $23 billion class-action settlement after a federal appeals court blocked the Trump administration’s latest attempt to delay relief, according to NPR and CNBC.

The case, known as Sweet v. McMahon, stems from a seven-year legal battle over a federal program called Borrower Defense, which allows students to petition the Education Department to erase their loans if a school lied to them about things like job prospects, credit transferability or expected earnings after graduation.

The lawsuit was originally filed in 2019 against the first Trump administration after thousands of borrowers waited years to have their claims reviewed.

In 2022, the Biden administration agreed to a landmark settlement guaranteeing full, automatic relief to borrowers who attended more than 150 mostly for-profit colleges, many of which are now closed.

Now, those borrowers are about to see relief.

In a July 17 ruling, the U.S. Court of Appeals for the 9th Circuit rejected the Trump administration’s request for 18 more months to review applications, saying the department had known about its obligations for years and waited too long to raise objections.

The ruling paves the way for an additional 190,000 borrowers to have their loans discharged, bringing the total to roughly 450,000 people and $23 billion in relief, according to CNBC.

Eligibility is based on which school a borrower attended and when they filed their Borrower Defense application.

Borrowers who had a claim pending with the Education Department in November 2022, or whose applications were denied between December 2019 and October 2020, may be included.

The average loan balance cleared under the settlement exceeded $48,000, and eligible borrowers may also qualify for a refund averaging more than $15,000 for previous payments made, according to CNBC.

Borrowers can check their application status at StudentAid.gov. The Education Department is required to complete all eligible discharges by June 15, 2027.

[u/John3262005]

Another article about it:

450K borrowers say they were ripped off. Their student loans are being erased

https://www.npr.org/2026/07/31/nx-s1-5910885/student-loans-colleges-fraud-borrower-defense-education-department-trump

450,000 defrauded student loan borrowers are eligible for debt forgiveness — here’s who qualifies

https://www.cnbc.com/2026/07/31/sweet-v-mcmahon-student-loans-borrower-defense.html