What Borrowers Need To Know About the Sweet v. Cardona Settlement

Nearly 300,000 federal student loan borrowers are receiving forgiveness through a landmark class-action settlement. This agreement stems from a lawsuit originally filed as Sweet v. DeVos (later renamed Sweet v. Cardona, and then Sweet v. McMahon, for subsequent U.S. education secretaries), which challenged the Department of Education's (ED) handling of borrower defense claims. Borrowers argued the Department had delayed or unfairly denied applications from students who claimed their schools misled them.

Under the settlement, many loans have already been discharged, and additional decisions and discharges will continue through Jan. 28, 2026.

If you're covered under the Sweet student loan settlement — or if you've submitted a borrower defense claim that's still pending or was denied — here's what you need to know about how the settlement works and what comes next.

What is the Sweet student loan settlement?

The Sweet student loan settlement is a class-action lawsuit brought by federal student loan borrowers in June 2019. The borrowers claimed they were misled or defrauded by certain schools and then denied the relief they were entitled to under borrower defense.

The lawsuit alleged the ED acted in bad faith by ignoring claims or issuing blanket denials without thoroughly reviewing the evidence.

“Sweet v. Cardona was a notable lawsuit because it exposed the Department of Education for dragging its feet and unfairly denying student loan forgiveness requests,” says Leslie Tayne, Esq., managing director of Tayne Law Group, noting that the student requests included proof that the schools misled or took advantage of them.

“It also clarified that students have the right to loan forgiveness when they've been misled and that the government must treat those claims seriously, fairly, and transparently.”

The final settlement was approved on Nov. 16, 2022. The ED has been issuing relief to eligible borrowers since then.

Who qualifies under Sweet student loan forgiveness?

You may be eligible for student loan forgiveness under the Sweet student loan settlement if:

• Your borrower defense claim was denied between December 2019 and October 2020, or
• Your borrower defense application was pending as of June 22, 2022.

If either applies, you're considered a class member under the Sweet student loan lawsuit.

Class members are divided into two groups:

• Automatic relief group: This includes borrowers whose applications were tied to one of the listed schools in the settlement. If you're in this group, you don't need to take any further action. The ED will automatically cancel your debt and provide full settlement relief. You can check the full list of schools included in the settlement to see if you qualify for automatic forgiveness.
• Decision group: This includes borrowers with pending borrower defense claims for schools not listed in the settlement. Your eligibility for relief depends on the outcome of your borrower defense application.

Current student loan refinance rates

Settlement relief and protections

Borrowers covered by the Sweet student loan settlement are eligible for specific protections and benefits. Those who qualify will receive what the ED calls “full settlement relief.” That includes:

• Discharge of any remaining federal student loan balances.
• Full refunds of past payments made on those loans.
• Removal of related loan records from the borrower's credit report.

If you're a class member, you don't need to make loan payments while your borrower defense application is under review or your discharge is being processed. Your loans also won't be sent to collections during this time.

If you applied after the class period — between June 23, 2022, and Nov. 15, 2022 — you're considered a post-class applicant and the ED will review your case under the 2016 Borrower Defense Regulation. A final decision on your application will be issued by January 28, 2026.

If the ED doesn't issue a decision within this time period, borrowers will receive full settlement relief.

“The settlement's emphasis on schools with widespread misconduct may set a precedent for how future cases are handled,” says Tayne. "Additionally, the case could lead to stronger protections for borrowers, encouraging the government to take more proactive steps in holding institutions accountable and ensuring fair treatment for students seeking loan relief."

Key deadlines in 2025

When you're in the automatic relief group

If you qualified for automatic full settlement relief, your benefits should have already been processed. The ED's deadline to provide full relief was Aug. 31, 2024.

Loan refunds are issued as one or more checks or direct deposits. These may come directly from the U.S. Department of the Treasury and might not mention the Sweet student loan settlement by name, so keep an eye out for any unexpected payments.

When you're in the decision group

If you're in the decision group, meaning your borrower defense claim wasn't tied to a listed school, the ED will review your application based on when you submitted it. You'll receive a decision by the dates outlined in the table below, depending on your application year:

How to check your application status

You'll be notified by email once a decision has been made, so check your inbox regularly, especially if you applied more recently. Look for an email coming from [email protected].

If the ED doesn't issue a decision by the deadline that applies to your case, you'll automatically receive full settlement relief.

What to do if you haven't heard anything

If you believe you should have been included in the Sweet student loan settlement but haven't received any updates, consider contacting the Project on Predatory Student Lending (PPSL). This legal group brought the class action and continues to advocate for borrowers misled by predatory schools.

“This is definitely something you want to do sooner rather than later,” says Ben Michael, attorney at Michael & Associates.

“When borrowers think they are a part of a class action lawsuit that PPSL is taking on, reaching out to them and getting included in that helps ensure that they will get any potential reparations that get secured by PPSL in their efforts,” he adds.

“They don't provide individual legal advice, however, so if that is something you are looking for, you may want to contact an attorney instead, and they can help you more specifically,” Michael advises.