Education Department agrees to cancel $6 billion in debt for some 200,000 students

Around 200,000 persons who had filed a class-action lawsuit against the U.S. Department of Education have received an agreement to have their student loans cancelled.

Former students alleged that institutions that had been found guilty of misconduct had forced them to repay government loans.

According to Miguel Cardona, the U.S. Secretary of Education, CNBC

Around 200,000 people filed a class-action complaint against the government, saying they were saddled with federal obligations from institutions that were later revealed to have lied to them. The U.S. Department of Education has now agreed to cancel their student loans.

The Education Department will promptly authorize almost $6 billion in debt forgiveness in accordance with the provisions of the Sweet v. Cardona settlement. The 200,000 borrowers who qualify for relief will receive full debt cancellation, returns of amounts paid, and credit restoration.

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Around 264,000 class members, who claimed that the Education Department had rejected their requests to have their loans cancelled, were represented by the plaintiffs when they filed their complaint against the Trump administration in 2019. After current U.S. Secretary of Education Miguel Cardona took over for previous Trump appointee Betsy DeVos, the lawsuit’s name was later changed from Sweet v. DeVos to Sweet v. Cardona.

Eileen Connor, director of the Project on Predatory Student Lending at Harvard Law School, said, “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.”

The Education Department has found that several dozen schools involved in the settlement engaged in misbehavior, and the project prepared a list of those institutions.

Cardona stated in a statement that “the Biden-Harris Administration has fought to address enduring challenges connected to the borrower defense process since day one.”

“We are pleased to have worked with Plaintiffs to reach an agreement that will automatically provide billions of dollars in relief to roughly 200,000 Borrowers and that, in our opinion, will resolve Plaintiffs’ claims in a manner that is fair and equitable for all parties,” the defendants wrote in their agreement.