Additional Coverage:
- Department of Education’s deadline slip-up turns into student debt relief for thousands (marketrealist.com)
Oops! Government Misses Deadline, Thousands of Student Loans Could Be Forgiven
Good news for thousands of Americans burdened with student debt! It looks like a significant number of borrowers might see their loans forgiven, all thanks to the U.S. Department of Education missing a crucial deadline.
Under the terms of a 2022 settlement agreement stemming from the Sweet v. Cardona case, the Department of Education was supposed to make decisions on a large group of Borrower Defense applications by January 28th. Well, that date has come and gone, and reports suggest the deadline was missed, potentially triggering automatic debt forgiveness for those affected.
While there’s still a bit of an “it’s not over until it’s over” vibe, the outlook for these borrowers is certainly optimistic. The *Sweet v.
Cardona* case accused the Education Department of improperly denying Borrower Defense to Repayment applications. This program is designed to protect students who took on debt for higher education but were misled by their schools, for example, about costs, future earnings, or job opportunities.
When such misconduct occurs, the loans can be canceled.
Many borrowers who fell victim to these circumstances have already seen their loans forgiven. This latest group was next in line for a decision by January 28th.
Since that didn’t happen, the path is now clear for automatic loan cancellations. This applies to individuals who submitted a Borrower Defense to Repayment application on or before June 22, 2022, and attended one of the specific schools listed in the settlement.
The Education Department actually tried to get an extension on this deadline back in November, citing the “unanticipated size of the post-class pool” and “unexpected resource constraints.” They even requested a further extension until July 2027, but both requests were denied by the court. The court noted that “actual progress was nowhere close to what the Court projected,” leaving the department obligated to provide “full settlement relief” if they failed to meet the January 28th deadline.
So, for thousands of student loan borrowers, a missed government deadline could translate into a fresh start, free from the weight of their debt. Stay tuned for further updates as this story develops!