STATEMENT: Borrowers Oppose Department of Education’s “Eleventh Hour” Settlement Delay Tactics in New Sweet v. McMahon Court Filing
“Defendants cannot stay a deadline that has already passed."
BOSTON, March 10, 2026 – Class members in the borrower defense lawsuit Sweet v. McMahon (formerly Sweet v. Cardona and Sweet v. DeVos) have filed a new opposition to the Department of Education’s motion for an emergency stay of a court-ordered deadline in the landmark borrower defense settlement. Two district court judges have already rejected the Department’s attempts to alter the deadline, and the Department did not file its current motion until a month after the deadline had passed.
The plaintiffs’ filing states: “Defendants cannot stay a deadline that has already passed. Defendants had an opportunity to seek a stay before the deadline, and they did not. There is no emergency here.”
The Department’s motion comes after Judge Haywood Gilliam recently denied the Department of Education’s "eleventh hour” request for an 18-month extension of the deadline to decide post-class applications and affirmed a prior court ruling enforcing the settlement timeline.
Statement from Eileen Connor, President and Executive Director of PPSL:
“The Department cannot rewrite a settlement it agreed to over three years ago simply because it missed its own deadline. For years, borrowers have carried the burden of loans from fraudulent schools and government delay, and the Department’s last-minute attempt to change the rules should be rejected. Our clients have waited long enough, and we will keep fighting until every borrower receives the relief they were promised.”
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 to full settlement relief.
On February 24, 2026, Judge Gilliam (assigned to the case after Judge Alsup’s retirement) denied the Department’s second motion to extend the deadline. The Department has filed an appeal of both Judge Alsup’s and Judge Gilliam’s orders.
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.
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