By Nathalie Voit
The Department of Education on June 22 agreed to cancel around $6 billion in debt for some 200,000 borrowers who filed a class-action lawsuit against the agency back in 2019.
The lawsuit, Sweet v. Cardona, was first filed in a California federal district court in June 2019 by seven students on behalf of themselves and some 264,000 class members whose applications for loan cancellation were allegedly ignored by then-Secretary Betsy DeVos’ Department of Education. Once Miguel Cardona replaced Trump-backed DeVos as the U.S. Secretary of Education, the suit’s name was changed from Sweet v. DeVos to Sweet v. Cardona.
According to details of the proposed settlement, the government will immediately cancel the student loans of 200,000 individuals who borrowed to attend certain schools, totaling approximately $6 billion in outstanding debt relief. The government said these 200,000 borrowers would get full settlement relief, including full discharge of their loans, a refund of amounts paid, and credit repair.
The second group of the plaintiff class consists of the 64,000 individuals who took on debt to attend schools not on the list and will have their applications reviewed on a rolling basis. The government said claims will be reviewed using a streamlined process that is “favorable to borrowers.”
“Since day one, the Biden-Harris Administration has worked to address longstanding issues relating to the borrower defense process. We are pleased to have worked with plaintiffs to reach an agreement that will deliver billions of dollars of automatic relief to approximately 200,000 borrowers and that we believe will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties,” Cardona said in a statement regarding Wednesday’s filing.
