BREAKING: Court Denies ED’s Motion for Delay of Borrower Defense Settlement in Sweet v. McMahon
Judge Shuts Down Department’s “Eleventh Hour” Delay Tactic, Protecting Hard-Won Relief for Borrowers
OAKLAND, February 24, 2026 – Today, Judge Haywood Gilliam denied the Department of Education’s attempt to delay relief for class members in the borrower defense lawsuit Sweet v. McMahon (formerly Sweet v. Cardona and Sweet v. DeVos), rejecting the government’s renewed request for an 18-month extension of the deadline to decide post-class applications and affirming a prior court ruling enforcing the settlement timeline.
Judge Gilliam’s decision states:
“At no point before November 2025 did the Department signal that it would have any trouble meeting its deadline to adjudicate all post-class applications. Rather, the Department waited until the eleventh hour, not even three months before the January 28, 2026 deadline, to seek the relief now requested. The Court agrees with Plaintiffs that to justify such relief, “a party must show ‘extraordinary circumstances’ suggesting that the party is faultless in the delay.” Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 393 (1993). Defendants have shown no such circumstances.”
Statement from Eileen Connor, President and Executive Director of PPSL:
“Today’s decision sends an unmistakable message: court orders are not optional. The Department tried to run out the clock on nearly 200,000 borrowers, offering last-minute excuses for its own delay — and the Court shut that down. This is a huge win for our clients, who have endured years of financial and emotional hardship while waiting for justice. The law is on our side, and we will stand with them until every single class member receives the hard-won relief they are owed.”
Case Background:
With weeks to go before a settlement deadline in the landmark borrower defense lawsuit, the Department requested an 18-month extension of that deadline, which would have drastically delayed relief owed to nearly 200,000 post-class applicants (people who submitted a borrower defense application between June 23, 2022, and November 16, 2022). PPSL filed a response on behalf of the Plaintiffs, detailing the significant financial harm caused by ongoing delay and uncertainty.
On December 11, 2025, Judge Alsup (the case’s previous judge who retired at the end of December) ruled that post-class applications involving Exhibit C schools — schools for which the Department identified strong indicia regarding substantial misconduct, whether credibly alleged or in some instances proven — must be adjudicated by the original deadline of January 28, 2026, or be automatically approved. Applications involving Exhibit C schools make up roughly 80 percent of the post-class in Sweet v. McMahon.
At that same hearing, Judge Alsup granted a brief delay for the remaining applications, extending the deadline until April 15, 2026. In his ruling, he called the requested 18-month delay “unacceptable” — acknowledging the stakes for the hundreds of thousands of borrowers who have been living with the financial strain, the emotional toll, and the instability caused by prolonged uncertainty.
On January 22, 2026, the Department of Education again asked the court to extend the deadline for deciding post-class applications related to Exhibit C schools. PPSL opposed the motion on multiple grounds. Meanwhile, the January 28 deadline passed. According to the final settlement agreement, approved more than three years ago in November 2022, if the Department of Education does not issue borrower defense decisions on the agreed upon timeline, affected borrowers are entitled full settlement relief.
The Named Plaintiffs brought this lawsuit in 2019 on behalf of themselves and all other federal student loan borrowers whose claims for loan cancellation (“Borrower Defense applications”) had been ignored by the Department of Education — many of them since 2015.
The law is clear: students who experienced fraud should not be required to pay back federal loans. Since the Department of Education repeatedly ignored these students’ legal rights, the only way they could have their voices heard was through the courts.
For more information about Sweet v. McMahon and the settlement, visit our website.
About the Project on Predatory Student Lending
The Project on Predatory Student Lending (PPSL) is the leading legal organization representing student borrowers against predatory for-profit colleges and the policies that enable institutions to exploit and cheat students. PPSL uses bold, strategic litigation and advocacy to demand accountability in the higher education space and influence policy solutions to create a more just and affordable education system. PPSL represents more than two million student borrowers and its work has resulted in cancellation of more than $30 billion of fraudulent student loan debt.
