Students who were defrauded by a for-profit school have been granted relief by President Joe Biden's Education Department.
Thousands of student-loan borrowers filed borrower defense claims with the department
That had been pending for years in a lawsuit named Sweet vs. DeVos that was brought against the
former Education Secretary Betsy DeVos in 2019. A borrower who believes they were defrauded by
a for-profit institution can file such a claim, and if approved, they can receive full student loan repayments.
As a result of the backlog of claims under DeVos, the lawsuit was filed.
200,000 borrowers with stalled defense claims could receive $6 billion in relief from a settlement announced by Biden's Education Secretary Miguel Cardona on Wednesday evening.
"The Biden-Harris Administration has addressed longstanding issues related to borrower defense from day one,"
Cardona said in a statement. According to our agreement with plaintiffs, billions of dollars will be provided
as automatic relief to approximately 200,000 borrowers in a fair and equitable manner for all parties.
These borrowers will receive refunds on any payments they made on their student debt,
and the remaining 68,000 students who did not attend a school evaluated in the settlement
will receive written settlement decisions "correlating to how long they have been waiting," with the earliest claims receiving a decision within six months of the agreement.