Ninth Circuit Forces Timely Debt Relief For 450,000 Defrauded Borrowers
On July 17, 2026, the Ninth Circuit rejected the Education Department's bid for an 18-month delay, clearing the way for timely loan discharges for more than 450,000 defrauded borrowers.[1]
The Sweet settlement covers more than 450,000 federal student loan borrowers and is projected to deliver over $23 billion in discharges and refunds.[1] Court filings show only about 60,000 post-settlement applications were processed by the department by the court-imposed deadline, leaving many claims set to be automatically erased.[1]
The 2022 Sweet settlement required the Education Department to approve or deny new borrower-defense claims within a fixed period, or the associated loans would be automatically discharged. The department sought extra time to finish reviews but the Ninth Circuit refused that extension, leaving the court-ordered deadlines in force.
The ruling could speed relief to borrowers who say they were misled by colleges and career schools and it increases pressure on the Education Department to process refunds and discharges quickly.
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📌 Key Facts
- On July 17, 2026, the Ninth Circuit rejected the Education Department’s request for an additional 18 months to review Sweet v. McMahon borrower-defense claims.
- The Sweet settlement covers more than 450,000 federal student loan borrowers and is projected to deliver over $23 billion in discharges and refunds.
- Court filings from the second Trump administration show only about 60,000 post-settlement applications were processed by the court-imposed deadline.
- The underlying 2022 settlement required the department to approve or deny new claims within a fixed period or automatically discharge the associated loans.
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