Court Continues to Side with Student Borrowers Against Attempts to Intervene in $6 Billion Borrower Defense Settlement
The Ninth Circuit denied the petition for a rehearing from one of three intervening schools, reinforcing that the intervenors have no standing in the settlement
SAN FRANCISCO (May 22, 2025) – In the class action lawsuit Sweet v. McMahon (formerly Sweet v. Cardona), the Ninth Circuit has rejected a petition for en banc re-hearing by Everglades College, Inc. Everglades was one of three intervening schools—a group that also included Lincoln Educational Services Corporation and American National University—seeking to overturn the Sweet settlement, which was approved in November 2022. The settlement cancels more than $6 billion in student loans, impacting more than 500,000 borrowers.
After a three-judge panel of the Ninth Circuit ruled against the intervenors in November 2024, Everglades sought a rehearing before a larger panel to reconsider that decision. The Ninth Circuit has now denied the petition, meaning the panel decision stands. The deadline for the intervenors to seek Supreme Court review of the Ninth Circuit decision is August 19, 2025. Meanwhile, since February 2023, nearly 250,000 class members have received full settlement relief.
“This decision reaffirms what the Ninth Circuit panel found and what we’ve known all along: the intervenors have no place in this case and the settlement must continue to move forward as it has been doing for the past two and a half years,” said Eileen Connor, President and Executive Director of the Project on Predatory Student Lending. “This case is about student borrowers who petitioned the government for loan cancellation on the basis of their schools’ misconduct. The law is on their side and the meritless appeals of a few desperate companies will not stop our clients from getting the settlement relief they are owed.”
Case Background
The settlement received final approval from the U.S. District Court for the Northern District of California on November 16, 2022.
On January 13, 2023, , the three schools filed notices of appeal attempting to block the settlement. They also asked the District Court to stay the implementation of the settlement pending their appeals. Judge William Alsup denied the motion to stay in February 2023, allowing the Department of Education to move forward with implementation according to the settlement agreement. The intervenors then petitioned the Supreme Court of the United States in April 2023 for a stay of settlement implementation, which was also swiftly denied. In November 2024, the Ninth Circuit denied their appeal.
This latest decision by the Ninth Circuit to reject Everglades’ petition for rehearing en banc reaffirms that the intervenors lacked standing to appeal the settlement and that they had no protectable legal interest in the litigation.
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 one million student borrowers and its work has resulted in cancellation of more than $22 billion of fraudulent student loan debt.
