A federal appeals court has ordered the Education Department to proceed with student loan forgiveness for over 500,000 borrowers under the Sweet v. McMahon settlement, including automatic relief for roughly 170,000 post-class applicants whose files missed government deadlines. The Ninth Circuit ruling on July 17, 2026, rejected the Department’s request for further delays, stating the agency had known the size of the affected group since February 2023. Relief covers cancellation of federal debt tied to the accused school, refunds for past payments, and credit report removal. Private loans are excluded. The settlement has already secured at least $23 billion in relief.
A federal appeals court has refused to let the government delay relief under the Sweet v. McMahon settlement, clearing the way to wipe out Education Department student loans for more than 500,000 borrowers. The Ninth Circuit ruled on July 17, 2026, and said the Education Department must move forward with student loan forgiveness for around 170,000 post-class Borrower Defense applicants.
The settlement, signed in 2022, set strict deadlines for processing old claims. Post-class applicants who filed between June 23 and November 15, 2022, faced a January 28, 2026 cutoff for Exhibit C schools and an April 15 extension for others. Both dates passed with thousands of files unresolved, triggering automatic relief under the settlement’s terms.
Eileen Connor, President of the Project on Predatory Student Lending, stated: “Once again, the courts have rejected the Department’s attempts to evade its obligations to borrowers who have waited far too long for the relief they are owed.” Judge Kim McLane Wardlaw wrote: “The time for negotiating is over. You missed your deadline.”
Under Secretary of Education Nicholas Kent argued that the settlement, negotiated by the previous Administration, required automatic cancellation of up to $12 billion in student loans by January 2026 without proper vetting. Despite those objections, the ruling forces the Department to proceed.
Relief only covers federal debt tied to the school named in each claim. Borrowers receive cancellation of that loan balance, a refund for payments already made, and removal of the loan from their credit report. Private loans are not included. The settlement has already secured at least $23 billion in relief for more than 500,000 borrowers connected to schools accused of defrauding them. Claims filed after November 15, 2022 remain under regular review.
