There’s a certain kind of anger that comes from being promised something and then seeing the organization keep trying for years to get out of it. Since 2019, the Sweet v. McMahon case has been making things worse for the hundreds of thousands of student loan borrowers who are stuck in it.
A federal appeals court turned down the U.S. Department of Education’s latest attempt to put off meeting its legal obligations last Friday. It wasn’t a tough choice. In a seven-page decision, the three judges on the 9th U.S. Circuit Court of Appeals were pretty direct: the agency had not shown that enough had changed to justify changing the terms of a settlement it had already agreed to. When the Education Department signed off on the 2022 settlement, the court said, it already knew that there were about 179,000 people in the third group of borrowers. It knew by the beginning of 2023 that the number had gone over 205,000. It didn’t challenge the deadline for almost three years. “Thus, the record demonstrates that the DOE understood the implications of agreeing to the Settlement,” the court wrote. Take a moment to think about that sentence.
People who owed money on student loans filed the Sweet v. McMahon case in 2019 during the first term of Trump’s presidency. They said that the Education Department was purposely delaying their borrower defense applications. Borrower defense is a federal program that lets students get their loans forgiven if their schools lied to them or ripped them off. In theory, it’s there to help people who went to schools that lied to them about things like job placement rates, accreditation, and the quality of their programs. For many people who wanted to borrow money, the application process had turned into a dead end.
In the 2022 settlement, applicants were split into three groups. The first group, which included about 200,000 students at 151 schools that the Education Department had flagged for bad behavior, got help right away. About 64,000 borrowers in the second group were told they would get decisions quickly. We told the third group the same thing. These were the people who filed applications in the months between when the settlement was first announced and when it was officially approved by the court. In the end, that last group had more than 207,000 people in it, making more than 251,000 claims.
When the Trump administration took over, the Education Department started to push for an 18-month extension on the deadline for that third group. Officials said they couldn’t have known that group would grow so big. The appeals court didn’t change its mind. The agency’s own records showed that wasn’t true.
Court records show that as of April, the Education Department had forgiven or refunded about $12 billion in loans for about 300,000 borrowers as part of the settlement. That’s a big number. It makes the machinery seem like it exists. It’s a different question whether the will to use it has been steady.
The group that represents these borrowers, the Project on Predatory Student Lending, is led by Eileen Connor. Friday’s decision was seen as another step toward delivering on what the settlement originally promised. “Once again,” she said, “the courts have rejected the Department’s attempts to evade its obligations to borrowers who have waited far too long.”
It’s still not clear if the Education Department will look into other legal options or start quickly processing the remaining claims. As we follow this case through the courts, it is clear that the Sweet v. McMahon student loans case has grown into something bigger than a simple bureaucratic dispute. It’s come to show what accountability looks like when a group of people or an organization would rather not deliver what they promised, and what it takes to make them keep their word.
