More than 170,000 federal student loan borrowers who said they were defrauded by their schools are set to have $11 billion in debt erased, after an appellate court sided with the borrowers and rejected a request from the Education Department for more time to review their claims.
The decision is the latest grant of mass relief in a class-action suit that was originally filed during President Trump’s first term. The suit centered on federal loans taken out by students who attended dozens of predatory for-profit schools. The government settled the case in 2022, under former President Joseph R. Biden Jr., and forgave the student loan debts of nearly 300,000 borrowers who had become plaintiffs in the class action.
But the settlement required the government to keep reviewing fraud claims from borrowers who filed after the 2022 deal was announced. The agreement set a deadline of early 2026: If the Education Department had not adjudicated the additional claims by then, they were to be automatically approved.
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