A landmark lawsuit win is alleviating the crushing weight of student debt for a group of borrowers.
Bloomberg recently reported that the US Department of Education agreed to wipe out almost $6 billion in student loans for borrowers who filed a class-action lawsuit against the government, stating for-profit colleges misled them.
Nearly 200,000 borrowers are getting student debt relief via the Sweet v. Cardona settlement. This means they’ll get their student loan balances from the schools fully cancelled, refunds for any payments they made and updated credit reports.
“This momentous proposed settlement will deliver answers and certainty to borrowers who have fought long and hard for a fair resolution of their borrower defense claims after being cheated by their schools and ignored or even rejected by their government,” Eileen Connor, the director of the Project on Predatory Student Lending said in a statement to Bloomberg. She also stated the decision “charts a borrower defense process that is fair, just, and efficient for future borrowers.”
The borrowers claimed schools like ITT Technical Institute, the Art Institute, DeVry University, Brooks Institute and many more promised job prospects upon graduation, which were unfulfilled. The suit was filed in June 2019, stating that the Trump Administration “unlawfully withheld and unreasonably delayed” decisions on borrower defense applications while former Secretary Betsy DeVos was head of Department of Education.
“Since day one, the Biden-Harris Administration has worked to address longstanding issues relating to the borrower defense process,” Secretary of Education Miguel Cardona said in a statement shared by Bloomberg. “We are pleased to have worked with plaintiffs to reach an agreement… that we believe will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties.”