These Borrowers Will Soon Qualify for Automatic Student Loan Forgiveness—Are You Eligible?

KEY TAKEAWAYS

• About 160,000 borrowers who applied for loan forgiveness in 2022 may qualify for automatic debt discharge if they attended one of the more than 150 schools that engaged in misconduct.
• Eligible borrowers will receive a notice of forgiveness by March 29, and loans should be discharged within a year.
• Others who applied for loan discharge through the borrower defense program will also soon receive a decision about their application.

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About 160,000 borrowers who attended colleges accused of deceptive practiceswill soon learn whether they qualify for automatic forgiveness.

The Sweet v. McMahon lawsuit, filed in 2019, alleged that the Department of Education significantly delayed processing borrower defense applications. The borrower defense program forgives the debt of students who borrowed money to attend a school that engaged in misconduct, such as misrepresenting its graduation rates, employment after graduation, or the cost of a degree.

A settlement in that case was reached in 2022, and the Department of Education agreed to expedite processing and to make a decision on all borrower defense applications submitted prior to November 16, 2022, by January 28, 2026.

While many applications have been approved since then, about 200,000 borrowers who submitted a borrower defense application between June 23, 2022, and November 16, 2022, have still not received a decision.

The Department of Education requested an extension to respond to these applicants in November, but the request was rejected. Soon, most of the affected applicants should receive a notification that their debt will be forgiven.

It is important to note, however, that the Department of Education has recently appealed to a higher court, hoping it can reverse the previous rejection of an extension. A decision on this appeal has not yet been made.

Why This Matters

Borrowers who attended a school that engaged in misconduct may find it more difficult to find a job and repay their student loans post-graduation. And wiping out debt for 160,000 borrowers will improve the affected households’ finances, and could potentially boost consumer spending.

How Do I Know If My Loans Are Eligible For Automatic Forgiveness?

About 160,000 borrowers should be eligible for automatic forgiveness if they:

2. Took out federal student loans to pay for one of the more than 150 colleges that were identified by the Department of Education as very likely to have participated in misconduct.
3. Applied for a loan discharge through the borrower defense program between June 23, 2022, and November 16, 2022.
4. Did not receive a decision about their borrower defense forgiveness from the Department of Education by January 28, 2026.

These borrowers, who make up about 80% of the total 200,000 applicants, are eligible to receive “full settlement relief” under this court decision, according to the Project on Predatory Student Lending, the leading legal organization that represented borrowers in the Sweet v. McMahon case.

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Are Parent PLUS Loans Eligible for Forgiveness?

The eligible borrowers will receive a notice by March 29, 2026. Email notifications will generally come from the address [email protected]. Applicants will not be asked to pay for anything related to their borrower defense claim. Any message that asks for money is a scam.

The loans should be discharged within a year of receiving this notice of automatic forgiveness.

Borrowers have not been required to make payments while their borrower defense application was pending. If you did make payments after you applied for a loan discharge through borrower defense, you will be refunded for that in addition to the forgiveness.

Can I Still Get Borrower Defense Forgiveness If I Am Not In This Group?

While the Sweet settlement specifically affects borrowers who applied for borrower defense forgiveness between June 23, 2022, and November 16, 2022, borrowers who applied before and after those dates may still be eligible for a loan discharge. They just won’t get it automatically.

About 20% of 200,000 post-class applicants did not attend one of the schools identified by the Department of Education as eligible for automatic forgiveness. These 40,000 applicants are not automatically entitled to “full settlement relief,” but are owed a decision from the Department of Education by April 15.

Borrowers who applied for the defense program after November 16, 2022, are not covered by the Sweet settlement, and their applications will be subject to the Department of Education’s standard regulations.

Borrowers who applied prior to June 23, 2022, should have already received their forgiveness. If they haven’t, they can contact the Department of Education at [email protected] to ask about their loan.

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