A new lawsuit filed against the U.S. Department of Education (ED) alleges the agency has failed to provide transparency regarding the status of promised student loan discharges affecting more than 1.5 million borrowers.

The legal challenge raises questions about whether billions of dollars in approved debt relief have actually been delivered.

Students seeking better jobs turn to for-profit colleges, often taking out federal loans only to discover many programs misled them with degrees that can be essentially worthless. 

“‘The government agreed to this settlement three years ago. It is fair to hold them to their word.” Plus, Ellis argued the government has pulled the rug out from under those who applied for relief back in 2022, some of whom have had their credit wrecked while their loans remain in forbearance. The panel did not indicate when it would rule.”’

A major deadline for certain federal student loans is only two weeks away, and failing to act could be a costly mistake for hundreds of thousands of borrowers. But many of them may not even be aware that they have to take action. Here’s what student loan borrowers should know about the upcoming consolidation deadline, and what’s at stake.

Student loan borrowers notched two major court victories this week. The wins should pave the way for tens of thousands of borrowers to receive automatic discharges of their federal student loans in the coming months, along with payment refunds and fixes to credit reporting.

In a sign of the Trump administration’s continued efforts to shutter the Department of Education, the agency is apparently pursuing selling off its $1.7-trillion student-loan portfolio to private entities.

Tens of thousands of student loan borrowers who say their schools misled them may soon find out whether that debt will be cleared after a Thursday ruling from a federal judge in San Francisco.

“PPSL, representing student loan borrowers in the Sweet settlement, countered that the request for a delay was patently unreasonable: ‘Judge Alsup has imposed strict parameters to ensure accountability in this settlement, including a series of hearings to report progress and ensure that settlement relief is on track,’ said PPSL in a statement.“

“U.S. District Judge William Alsup on Thursday denied the U.S. Department of Education's request for an 18-month extension to process over 200,000 loan cancellation applications for students claiming they were defrauded by colleges the attended, calling it ‘totally unacceptable.’”

The government will have to adjudicate all claims from applicants who attended schools with evidence of misconduct by the original January deadline but will get a three-month extension for all other claims.

In response to the Education Department’s request, lawyers for the borrowers slammed the department’s request: “Less than 12 weeks before the deadline, the Department reveals that not only is it behind schedule to meet that deadline, it never had a prayer of meeting the deadline,” PPSL said.

Hundreds of thousands of students who attended the colleges in question have been waiting for years for decisions on whether they will have their loans forgiven or not. The ongoing delays mean uncertainty and stress for those students and their families.

Over 40 congressional lawmakers told Trump administration officials that transferring debt ownership could strip borrowers of their protections.