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Update:
- A federal judge in California gave the green light to the U.S. Department of Education’s plan to cancel $6 billion in student debt accrued by students claiming their colleges defrauded them.
- The settlement resolves claims the Department of Education failed to process applications for debt cancellation brought by students arguing their schools misled them or engaged in conduct that violated state laws in a timely manner.
- The judge overseeing the settlement agreement ruled it will provide “extensive relief” for the class of students.
- The settlement will provide around $6 billion in total loan forgiveness for 75% of the class while streamlining the loan forgiveness for the remaining class members.
Student loan debt settlement overview:
- Who: The Department of Education has agreed to a class action settlement with around 200,000 student loan borrowers.
- Why: The settlement will resolve claims the DOE stalled the borrower defense applications of around 200,000 student low borrowers.
- Where: The class action settlement was proposed in California federal court.
(Aug. 05, 2022)
The U.S. Department of Education (DOE) has agreed to a class action settlement which will cancel the student loan debt of around 200,000 students whose claims had been stalled.
The settlement will provide $6 billion in student loan debt relief for borrowers from more than 150 schools, including for-profit colleges and fraudulent universities such as Westwood College in Chicago, according to a news release put out by U.S. Senate Majority Leader Dick Durbin (D-IL).
Individuals who were denied relief from the DOE when it was being overseen by former Secretary Betsy DeVos will also have their loans forgiven and compensated for amounts previously paid.
The DOE has also agreed to process any remaining borrower defense applications involved in the class action lawsuit within the next six to 30 months, per the settlement agreement.
Durbin said in a statement last week that he was “pleased to see the Department is correcting their previous inaction.”
“Under the Trump Administration, former Secretary DeVos cruelly ignored the pleas of students defrauded by schools like Westwood College and left them to drown in student debt. Today, the Biden Administration and Secretary Cardona threw a $6 billion lifeline to these students,” Durbin said.
Borrowers file aomplaint against DeVos, DOE over claim stalls
A class action lawsuit was originally filed against the DOE in 2019 by seven students who claimed the agency, under Devos, had refused to process their borrower defense claims.
The students would go on to ask to represent a Class of any borrower who had their borrower defense claims hampered by the DOE, according to the release.
A previous settlement agreement proposed by the DOE was rejected by the federal judge overseeing the case in the fall of 2020.
The judge determined that DeVos and the DOE had found a way around honoring the proposal by denying the bulk of pending applications.
Have you been affected by student loan debt? Let us know in the comments!
The Student Loan Debt Class Action Lawsuit is Sweet, et al. v. Cardona, et al., Case No. 3:19-cv-03674, in the U.S. District Court for the Northern District of California.
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80 thoughts on$6B student loan debt cancellation settlement over fraud receives final approval
Seeking help if my student loans situation qualifies: 1) Golden State Business College and now college shut down; 2) University of Phoenix. Loans have been since 1993. Federal loans and Pel Grants used for both
Please add me
I applied back in July and still waiting. Please add me!
Please add me in regards to my student loan service Fed Loan Services/Delta State University/Ashford University..
How can I be a part of this lawsuit I have AES and they have put me into ferment so many times actually exceeded the amount of time they actually could
Brenda
Add my name please.
I sent my BDR application Through certified mail and it was delivered to their PO. Box on May 31, 2022- before the June 22,2022 deadline date. And they have yet to load my application in their system.
My application is sitting inside of a parcel locker.
This company is still delaying processing these BDR applications.
I also went to ITT Tech 2005 – 2007
I was told that the Department of Education is fighting the legal side of this for us to get the federal loans forgiven so we don’t have to obtain a lawyer to fight to cancel out
the loan for us.
It’s a waiting game.
I don’t know how true this information is but when I called on Friday 10/7/2 I spoke to an agent in the loan management department.
And this was told to me.
If anyone knows of another class action lawsuit for the Navient private student loans can you reply.
My private student loan that Navient service will not be forgiven .
Just wanted to add camaraderie here: I paid off the federal portion of my loan from one lousy semester of Westwood pretty quickly, and have been paying the $5000 private loan portion for SIXTEEN YEARS, and my balance is down to $3200. I’ve paid over $7000 in interest alone. I filed for bankruptcy a few years back and this loan was not discharged because it’s a student loan, yet this loan does not qualify for any student loan forgiveness because it’s a private loan. It’s complete and utter bullshit, and there is literally nothing I can do about it. So you have company, unfortunately.
Is it to late to be added to it tech lawsuit bc I was falsely promised they would get me a job and my credits would be transfered and also persuaded to make not only student loans but federal loans as well and I can’t get back in school bc I owe on those and also it messed up my credit bad
Is it too late to get added to the lawsuit? Chamberlain University
Grabber school of hair design on St Louis Missouri it’s also guilty of having students take out loans for student loans for ungodly amounts and then dropping out of school but wanting to return but can’t because of office personal and the student paying school back on top of student loans to the students not being able to pay back the loans due to financial issues. It’s unreal the amount of schools that will let anybody sign for a student loan known good and will they can’t pay it back is ridiculous
I also attended Westwood. I submitted a BDR on 8/14/2019 yet still remains under review. We had done some consolidating to pay off the loans but that just shifted the payments into one and lowered it. Still need the refund to pay this off, the school was horrible and now that it closed there is no longer any type of resources that were promised by the school.
How can I be a part of this lawsuit I have AES and they have put me into ferment so many times actually exceeded the amount of time they actually could