Student Loan Borrowers Could Get Automatic Discharges, Refunds After Sweet Deadline Passes 

Washington, D.C. — Tens of thousands of federal student loan borrowers could be in line for automatic loan discharges, and refunds of past payments, after a key deadline passed in the long-running Sweet borrower-defense settlement, a case that has reshaped how the government handles claims tied to alleged school misconduct. 

The settlement (now known as Sweet v. McMahon, reflecting Education Secretary Linda McMahon) covers borrowers who filed Borrower Defense to Repayment applications, a program that can cancel federal loans when a school is found to have misled students about costs, outcomes, or other material facts. 

A large group called “post-class applicants” people who applied between late June 2022 and mid-November 2022 was supposed to receive decisions by set court timelines. For applicants connected to schools on the settlement’s Exhibit C list, the decision deadline was January 28, 2026; if no decision was issued by then, those applicants are entitled to “full settlement relief,” which can include discharge, refunds, and credit-report corrections. 

The U.S. Department of Education has argued it lacks resources to finish reviewing the full volume of claims on time and has asked the court for more time, while borrower attorneys have pushed back. A court hearing on the latest dispute is scheduled in early February, leaving uncertainty about timing even as the deadline has technically passed. 

What parents should do now: log in to your Federal Student Aid account to monitor your loan status, save screenshots of any Borrower Defense updates, and watch for official emails, while ignoring unsolicited “forgiveness help” pitches that may be scams. The official Sweet settlement page on StudentAid.gov is the best place to track updates.