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Student Loan Forgiveness: Appeals Court OKs Remaining Forgiveness To Proceed

Student Loan
WASHINGTON, DC - NOVEMBER 18: Student loan borrowers protest the GOP outside the Republican National Committee for denying student loan relief to 40 million borrowers on November 18, 2022 in Washington, DC. (Photo by Paul Morigi/Getty Images for We The 45 Million)

A federal appeals court has made a decision that makes it possible for the Biden administration to get rid of student loans and help people with other kinds of debt. This is part of a historic agreement to resolve stalled Borrower Defense to Repayment claims. 

In February, a federal district court said that the settlement relief for the Sweet vs. Cardona case could go forward. For several years, the Education Department was sued by thousands of people who had taken out student loans. 

Nearly a quarter of a million people who went to one of the several dozen schools (mostly for-profit schools) listed in the settlement agreement would get their student loans forgiven for $6 billion. Some borrowers might also be able to get other help, like a refund on a payment or an update to their credit report. 

Student Loan

Activists hold cancel student debt signs as they gather to rally in front of the White House in Washington, DC, on August 25, 2022. – Biden announced on August 24, 2022, that most US university graduates still trying to pay off student loans will get $10,000 of relief to address a decades-old headache of massive educational debt across the country. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)

$6 Billion Student Loan Forgiveness For Over 200,000 Borrowers To Proceed

The Ninth Circuit Court of Appeals denied the challengers’ request for a stay last week, saying they “fail to show a sufficient likelihood of irreparable harm to warrant a stay of the challenged settlement while these appeals are pending.” This means that all of the Sweet v. Cardona settlement benefits can go forward while the challengers’ appeal continues. 

“On March 29, 2023, the Ninth Circuit Court of Appeals denied the intervenor entities’ motion for a stay pending appeal,” said the Project on Predatory Student Lending, the organization representing the class of student loan borrowers, in an update on its website.

Those who went to American National University, Everglades College/Keiser University, and Lincoln Tech can get their settlement money. Now, the Department of Education can move forward with plans to help everyone in the class. 

READ ALSO: Expect More Student Loan Forgiveness From Biden’s Education Department After Its Success In 2022

Who is Eligible?

Now that the full relief from the Sweet v. Cardona settlement is being put into place, covered borrowers can look forward to getting relief on a rolling basis. Class members are borrowers who submitted a Borrower Defense to Repayment application to the Education Department by June 22, 2022, and went to one of the schools on the approved list in the settlement agreement. Over the next year, their student loans will be automatically forgiven, and they will also get other debt relief. 

Borrowers who asked for help from Borrower Defense after June 22, 2022, but before the court approved the Sweet v. Cardona settlement agreement on November 16, 2022, is called “post-class applicants” under the agreement. These borrowers aren’t automatically eligible for relief, but they should hear back about their applications within 36 months. If they don’t, they could get “full settlement relief.” 

As part of the Sweet v. Cardona settlement, the Project and Predatory Student Lending have set up a website with a lot of information about who can get their student loans forgiven and what other kinds of help they can get.

READ ALSO: Student Loan Forgiveness Debt Relief: What States Offer The Program?

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