A federal appeals court has refused to let the government delay relief any further under the Sweet v. McMahon settlement, clearing the way to wipe out Education Department student loans for more than 500,000 borrowers. The Ninth Circuit ruled on July 17, 2026, and said the Education Department must move forward with student loan forgiveness for around 170,000 post-class Borrower Defense applicants, since these Education Department student loans fall under a student loan forgiveness settlement the agency signed back in 2022. At the time of writing, there’s no real sign the Department plans to push back any further.
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Education Department Student Loan Forgiveness Under Sweet Settlement
The Department Missed Deadlines It Had Agreed To
This goes back to thousands of Borrower Defense to Repayment applications that just sat there for years, unresolved, the same claims behind student loan forgiveness efforts right now. Back in 2022, the two sides signed an agreement, the Sweet v. McMahon settlement, laying out a strict timetable for old claims, with automatic relief kicking in for anyone whose file blew past a deadline. Post-class applicants, people who filed between June 23 and November 15, 2022, faced a January 28, 2026 cutoff for Exhibit C schools, and an April 15 extension for everyone else.
Both dates came and went with thousands of files still open. These triggered full relief for student loans under the settlement’s own terms. The Department asked for more time, and the Ninth Circuit said no, pointing out the agency had known how big this group was since February 2023.
What Borrowers Are Entitled To Receive
Relief tied to student loans only covers whichever school the claim names, not every debt a borrower happens to carry. Borrowers who qualify under this student loan forgiveness settlement get three things. We are talking about cancellation of the federal balance tied to that school, a refund for payments already made, and removal of the loan from their credit report. Private loans stay out of it completely. Only federal debt tied to Borrower Defense student loans falls under the agreement.
Here’s how the deadlines for these Education Department student loans break down by group:
| Borrower Group | Deadline | Result |
|---|---|---|
| Post-class, Exhibit C school | Jan 28, 2026 | Full relief |
| Post-class, other school | Apr 15, 2026 | Full relief |
| Filed after Nov 15, 2022 | Not covered | Regular review |
Claims filed after November 15, 2022 sit outside the Sweet v. McMahon settlement, and the government reviews those under regular Borrower Defense student loans rules instead. This student loan forgiveness settlement has still secured at least $23 billion in Education Department student loans relief for more than 500,000 borrowers connected to schools accused of defrauding them, and the current ruling protects the roughly 170,000 people whose files sat past the government’s own deadlines.
What Officials Are Saying
Officials on both sides of this Education Department student loans dispute have had plenty to say publicly, and some of it got pretty pointed.
Eileen Connor, President and Executive Director of the Project on Predatory Student Lending, said:
“Once again, the courts have rejected the Department’s attempts to evade its obligations to borrowers who have waited far too long for the relief they are owed. Today’s decision brings us another step closer to fulfilling the settlement’s promise to every borrower, and we won’t stop fighting until that promise is realized.”
Ninth Circuit Judge Kim McLane Wardlaw stated:
“The time for negotiating is over. You missed your deadline.”
Under Secretary of Education Nicholas Kent had this to say:
“The Sweet settlement, negotiated by the previous Administration, imposes a timeline that would require the Department to automatically cancel up to $12 billion in student loans by January 2026 without proper vetting. Although the Department has complied with the Court’s deadlines in good faith, the upcoming January deadline is unreasonable.”
Despite those objections, Education Department student loan forgiveness kept moving forward for Borrower Defense student loans applicants under the settlement, and right now there’s nothing stopping it. It’s a lot of Education Department student loans changing hands at once, and a lot of money along with it.