The class-action lawsuit focused on federal student loan borrowers has seen three education secretaries involved: Sweet v. DeVos in 2019, Sweet v. Cardona during Biden’s term, and now Sweet v. McMahon under Trump’s administration. This lengthy legal fight involves nearly half a million borrowers claiming they were misled by their colleges.
The lawsuit arose during Trump’s first term and questioned the Department of Education’s handling of the borrower defense rule. This rule lets borrowers request debt cancellation if their school deceived them about job prospects, credit transfers, or salaries after graduation.
Under Secretary DeVos, claims were delayed or denied without fair consideration, prompting advocates to turn to the courts. Over its extensive journey, the lawsuit has been associated with changing education secretaries until reaching its current form.
Advocates report that the settlement impacts over 450,000 individuals, improving their finances by more than $23 billion. Eileen Connor of the Project on Predatory Student Lending indicates this settlement is the largest of its kind against the U.S. government.
Lengthy Legal Process Explained
In 2022, the Biden administration secured a settlement, granting relief to borrowers from over 150 primarily for-profit colleges. This agreement also allowed an additional 250,000 borrowers to seek help. However, the processing of these claims lagged.
Despite the Department’s request for more review time, the U.S. Court of Appeals for the Ninth Circuit rebuked the department for its delay in raising concerns about the settlement obligations. The court emphasized that the terms were clear early on.
Education Department spokesperson Ellen Keast described the Sweet settlement’s timeline as unrealistic, stating that the department had acted earnestly within the constraints. However, the court did not accept this explanation.
Personal Stories Highlight the Struggle
Jessica Feindt, a borrower involved post-settlement, reflects on her lengthy struggle. Hoping for a psychology degree from the University of Phoenix, she ended up with significant debt. Misled by the school’s recruitment counselor regarding program acceptance, she later filed a borrower defense claim.
The education department revealed it had provided $12 billion in relief to nearly 300,000 borrowers post-settlement. Additional relief is set to increase following the recent court ruling.
Eileen Connor draws parallels between this case of schools deceiving borrowers and the Big Tobacco litigation against harmful products. For Feindt, who recently saw her federal student loans erased, the relief is bittersweet after years of financial strain.
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