Former students said misconduct-plagued schools left them with federal liens.
Around 200,000 people initiated a class action complaint against the government, claiming they were trapped with federal bills from deceived schools.
The Education Department will forgive $6 billion in debt under the Sweet v. Cardona settlement. 200,000 borrowers will get debt cancellation, rebates, and credit restoration.
The plaintiffs sued the Trump administration in 2019, representing 264,000 class members whose loan cancellation requests were rejected. (The suit was renamed Sweet v. Cardona after Miguel Cardona replaced Betsy DeVos as education secretary.)
“This monumental proposed settlement will offer answers and certainty to borrowers who have battled long and hard for a fair resolution of their borrower defence claims after being defrauded by their institutions and disregarded or rejected by their government,” said Harvard Law School’s Eileen Connor.
The Project created a list of dozens of schools participating in the settlement and found to have committed misconduct.
Since day one, the Biden-Harris Administration has addressed borrower defence challenges, Secretary Cardona noted.
“We’re glad to have worked with plaintiffs to establish an agreement that will deliver billions of dollars in automatic relief to around 200,000 borrowers and resolve plaintiffs’ claims fairly and equitably for all parties.”