Judge Denies ED’s Request for 18-Month Delay of Borrower Defense Settlement in Sweet v. McMahon
SAN FRANCISCO, December 11, 2025 – After hearing arguments in the class action borrower defense lawsuit Sweet v. McMahon (formerly Sweet v. Cardona and Sweet v. DeVos), Judge William Alsup issued a bench ruling rejecting the government’s request for an 18-month extension of a major deadline for post-class applications.
Judge Alsup 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.
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.
Referring to post-class applicants, Judge Alsup said, "They have great interest in this because the student loan has been hanging over their head for how many years, how many decades, wrecking their credit.” Judge Alsup emphasized, “It’s just not right.”
The Department’s continued progress deciding post-class applications will be monitored closely by the PPSL team and the Court. Judge Alsup announced his retirement at year’s end, and notified the courtroom that the Sweet case will continue under a different judge who will handle the Department’s adherence to the new April 15, 2026, deadline for the impacted segment of the post-class.
Statement from Eileen Connor, President and Executive Director of PPSL:
“The Court sent a clear message today: borrowers deserve fair, timely decisions, not years of uncertainty. This is a critical victory for people who have waited far too long for justice and relief, but this case isn’t over. We will continue to fight and stand with our clients until every single class member gets the relief they are legally entitled to under the court-binding settlement agreement.”
Background:
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. The accountability hearings began after borrowers filed a motion to enforce the borrower defense settlement in March 2024, after the Department of Education violated the agreement by failing to meet the original January 28, 2024, deadline to effectuate relief for members of the “Automatic Relief Group.”
With less than seven weeks to go before the settlement deadline in the landmark borrower defense lawsuit, the Department’s request 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 oh behalf of the Plaintiffs, detailing the significant financial harm caused by ongoing delay and uncertainty.
According to the final settlement agreement, approved more than 3 years ago in November 2022, if the Department of Education does not issue borrower defense decisions according to the agreed upon timeline, borrowers should receive full settlement relief.
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.
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