A years-long legal battle that left hundreds of thousands of student loan borrowers in limbo is ending.
After a recent court ruling, students who were defrauded by the schools they attended — mostly for-profit colleges that misrepresented the value their degrees could offer students — may soon get relief.
The Sweet v. McMahon case has been ongoing since 2019. Though a settlement was approved in 2022, some eligible borrowers still haven’t had their loans discharged or refunded. Appeals from the Department of Education and affected schools have led to delays in the process.
But the July court ruling will offer relief to more than 170,000 additional borrowers who qualify as of earlier this year. According to the Project on Predatory Student Lending (PPSL), which represents the borrowers, Sweet v. McMahon is now the largest-ever settlement against the U.S. government and totals at least $23 billion in relief. In addition to the latest 170,000 borrowers, more than 271,000 borrowers had already gotten relief from the settlement as of 2025.
Here’s what those who applied for relief under the settlement should know now.
More about the Sweet v. McMahon settlement
The Sweet v. McMahon settlement (previously known as Sweet v. DeVos, then Sweet v. Cardona) was filed in 2019 on behalf of student loan borrowers seeking to have their loans discharged.
These borrowers claimed the relief under the borrower defense rule because they were misled by their schools. But after applying for the program, many students’ claims sat unresolved — sometimes for years.
The approved settlement
In 2022, a settlement was reached that allowed students who had previously filed a borrower defense application to have their loans discharged.
Borrowers who attended a school identified in a list of “Exhibit C” colleges were automatically eligible for full refunds and to have their loans discharged.
Borrowers who attended schools outside of the Exhibit C list were assigned a date (based on when they applied for the settlement) by which the department had to make a decision; if no decision was made by the deadline, the borrower would also receive full relief under the settlement.
Post-class applicants
The settlement terms included those who had already applied by the time the agreement was reached on June 22, 2022, as well as “post-class applicants” who applied between June 23, 2022, and Nov. 15, 2022, when the settlement got final approval.
450,000 Defrauded Student Loan Borrowers Are Eligible For Debt Relief. How It Works.
