FAQs for the Sweet v. Cardona Settlement

Be aware that there may be scammers contacting you regarding the Sweet v. Cardona lawsuit and settlement. As the Federal Trade Commission (FTC) says: Don’t pay anybody for anything related to your borrower defense claim. Nobody can move you up in line, give you special access, or guarantee a successful application. Not for free, and certainly not for money. And only scammers will ask. And if you spot a scam, tell the FTC: ReportFraud.ftc.gov. Visit the FTC’s website for more information. 

For the latest on the Sweet v. Cardona litigation, as well as relevant upcoming dates and case documents, please visit our case page. 

Class Membership 

  • The settlement defines the class as “all individuals who had a borrower defense application pending as of June 22, 2022.” Additionally, under the settlement, the Department of Education agreed to rescind all borrower defense denials that it issued between December 2019 and October 2020. If you received a form denial notice during that time period, the Department will treat your original application as if it had never been denied and you will be a member of the class.

  • The settlement divides the class—all individuals who had a borrower defense application pending as of June 22, 2022—into two groups.   

    The first group is the automatic relief group. You are a member of this group if you are a Class Member who submitted a borrower defense application relating to a school or schools on this list (often referred to as the “Exhibit C” list). If you are in this group, then you should have received the following relief on or before January 28, 2024: (i) discharge of the outstanding loans that were the subject of your application, (ii) refunds of any amounts you previously paid to the federal government toward those loans, and (iii) deletion of the credit tradeline associated with those loans from your credit report (“Full Settlement Relief”). If you are a member of the automatic relief group and you have not yet received your Full Settlement Relief, you can fill out this Relief Survey.

    The second group is the decision group. You are a member of this group if you are a Class Member who submitted a borrower defense application relating to a school or schools that are not on the Exhibit C list. If you are in the decision group, you will receive an individual decision on your entitlement to settlement relief according to a set timeline (see “What happens next for Class Members?” below). 

    If the Department fails to issue a decision within the timeline, you will receive Full Settlement Relief. 

    The Department will use a “streamlined” procedure to evaluate applications of Class Members in the decision group. This means that the Department will accept all allegations in the application as true; will not require further supporting evidence; will not require proof of reliance; and will not apply any statute of limitations. 

    If you are in the decision group and you are determined to be eligible for relief, you will receive Full Settlement Relief (the same benefits as members of the automatic relief group). You will receive this relief within one year of the date you receive your approval decision.  

    If you are in the decision group and the Department determines that your application does not meet the standards for approval under the streamlined procedures, you will receive a “revise and resubmit” notice. This notice will explain why your application was not approved and provide examples of successful applications. You will have six months from receipt of this notice to submit a revised borrower defense application to the Department. If you submit a revised application, the Department will have six months to either grant relief or issue a final denial notice. If you choose not to resubmit, your notice will convert to a final denial upon the expiration of the six-month resubmission window. If your application is denied, you have the right to challenge that denial in federal court.  

  • If you applied for borrower defense after June 22, 2022, but before November 16, 2022 (the date of final approval of the settlement), then you are not a member of the class as defined in the settlement agreement. Instead, you are a “Post-Class Applicant.” 

    The settlement provides certain benefits to Post-Class Applicants. Under the settlement, Post-Class Applicants will receive decisions on their applications by January 28, 2026. If the Department fails to provide any Post-Class Applicant with a decision during that time period, then they will receive Full Settlement Relief (the same relief as if they were a Class Member in the decision group who did not receive a timely decision). 

    Post-Class Applicants will receive individual decisions on their applications regardless of whether they borrowed money to attend a school on the Exhibit C list. In other words, even if you attended a school on the list, you will not receive automatic relief if you applied for borrower defense after June 22, 2022, but before November 16, 2022. Post-Class Applicants also will not have their applications reviewed under the “streamlined” procedures applicable to Class Members in the decision group. 

    Post-Class Applicants will have the credit tradelines for their discharged loans deleted from their credit reports if their borrower defense applications are approved. Post-Class Applicants will not automatically get refunds if their applications are approved, but they might get refunds depending on their individual circumstances. In general, the Department of Education applies a statute of limitations to decide whether a successful borrower defense applicant will get a refund along with discharge. The Department agreed that the limitations period would not apply to Class Members, but it will apply to Post-Class Applicants. Whether a Post-Class Applicant gets a refund will therefore depend on the facts in their application. 

  • If you applied for borrower defense after November 16, 2022, then you are not affected by the Sweet settlement. Your application will be decided by the Department according to the applicable regulations.

  • Yes! If your school misled you, violated state laws, or engaged in other misconduct that affected your decision to borrow federal student loans, you can still apply for borrower defense. However, if you apply for borrower defense now (any time after November 16, 2022), no aspect of the settlement will affect your application. Borrowers can apply for borrower defense here. For an informational guide on applying for borrower defense, click here. 

    You can apply for borrower defense even if you are currently enrolled in the school you would be applying for. Borrower defense can apply to any federal student loan that has already been disbursed.

Settlement Relief

  • Here is a timeline of important upcoming events for Class Members and Post-Class Applicants: 

    For the automatic relief group: 

    January 28, 2024: You should have received your Full Settlement Relief on or before this date.  If you are a member of the automatic relief group and you have not yet received your Full Settlement Relief, you can fill out this Relief Survey.

    For the decision group: 

    May 28, 2023: If you received a form denial notice between December 2019 and October 2020, you should have received a written notice by this date to confirm that your denial has been rescinded and your application is back under consideration.

    If you are a Sweet Class Member in the decision group and received a form denial notice between December 2019 and October 2020 but have not yet received a written notice confirming that your denial has been rescinded and your application is back under consideration, we want to hear from you. Please fill out our Class Notice Survey.  

     July 28, 2023: If you submitted your BD application on or before December 31, 2017, you should have received a decision by this date. If you did not, please fill out our Class Notice Survey.

    January 28, 2024: If you submitted your BD application between January 1, 2018, and December 31, 2018, you should have received a decision by this date. If you did not, please fill out our Class Notice Survey.  

    July 28, 2024: If you submitted your BD application between January 1, 2019, and December 31, 2019, you should receive a decision by this date. 

    January 28, 2025: If you submitted your BD application between January 1, 2020, and December 31, 2020, you should receive a decision by this date. 

    July 28, 2025: If you submitted your BD application between January 1, 2021, and June 22, 2022, you should receive a decision by this date. 

    If your application is granted, then within one year after you receive the decision, you should receive your Full Settlement Relief. If you are a member of the decision group who received an approval of your application, but you have not received your Full Settlement Relief within one year, please fill out this Survey.

    For Post-Class Applicants: 

    May 28, 2023: You should have received notice from the Department confirming your status as a Post-Class Applicant on or before this date.

    If you are a Post-Class Applicant and have not yet received notice from the Department of Education confirming your post-class status, we want to raise this with the Department. Please fill out our Class Notice Survey.  

    January 28, 2026: You should receive a decision on your application by this date.

  • Please note that this notice may have been sent to an email you no longer have access to or your spam folder. Before filling out the survey, please search every email inbox you have access to for an email from noreply@studentaid.gov. The email might have one of the following subject lines, as appropriate for your situation:

    Approval of Your Borrower Defense Case Under Exhibit C of the Sweet v. Cardona Settlement

    Sweet v. Cardona Settlement: Borrower Defense Notice to Revise and Resubmit

    Sweet v. Cardona Settlement: Borrower Defense Notice of Approval

    Sweet v. Cardona Settlement Post-Class Applicant Borrower Defense Notice

    If you are unable to locate a notice after searching for it, please fill out our Class Notice Survey.  

  • Under the Settlement Agreement, the Department was required to effectuate settlement relief for Class Members in the automatic relief group by January 28, 2024. However, we are aware that many members of the automatic relief group did not receive Full Settlement Relief by that date. On March 19, 2024, we filed a motion with the court to compel the Department to comply with the settlement. Updates on the status of that motion can be found on the Sweet v. Cardona case page.  

    We are unable to answer individual questions about refund amounts owed to Class Members. While we cannot confirm whether the amount you expect to be refunded is accurate, historically the Department of Education has sometimes disbursed refunds incrementally, via multiple different checks.

    If you are in the automatic relief group and still have not received the settlement relief that you believe you are eligible for, please complete the Relief Survey.

  • Regardless of your type of loan, if the Department garnished from your wages and/or took from your income tax refunds in connection with the loans that were the subject of your borrower defense application, those garnishments will be refunded.

  • No, to receive Sweet relief, you must have submitted a borrower defense application for each school for which you were requesting a discharge. You can still submit a borrower defense application for the other Exhibit C school(s) you attended, but that application will be decided under the applicable regulations, not under the Sweet settlement procedures.

End of COVID Payment Pause 

  • No. 

    The Department will hold Class Members in forbearance or stopped collection status, and will reimburse you for any accrual of interest, until you receive your settlement relief or, where applicable for members of the decision group, until a decision denying settlement relief becomes final. For Direct Loans, this should happen automatically; for commercially held FFEL loans, you may have to notify your servicer that you are eligible for an administrative forbearance based on borrower defense. 

    If you are a Post-Class Applicant or if you applied for borrower defense after November 16, 2022, you can still ask your servicer to place your loans in borrower defense forbearance until you receive a decision. (Alternatively, you might want to check whether you are eligible for $0 monthly payments under the new Saving for A Valuable Education income-driven repayment plan.) However, like with other types of forbearance, interest will still accrue on your loans while your BD application is pending. Whether you receive a refund of that interest upon resolution of your borrower defense application will depend on the applicable regulations. 

    Please note, Sweet / administrative forbearance will not apply to federal student loans that were not covered by your borrower defense application. If you have loans from another school that weren’t the subject of your application, those will return to repayment status. Additionally, neither the Sweet case nor applying for borrower defense in relation to your federal loans will impact any private loans you may have from the school for which you applied for borrower defense.

  • While servicers should know about Sweet relief and borrower defense forbearance, sometimes servicer representatives do not have the appropriate or accurate information. If this happens, reach out to Federal Student Aid ombudsman’s office and your servicer’s ombudsman’s office. Regardless of what your servicer says, if you received a notice from the Department about this settlement, that is the most accurate statement regarding your Sweet relief. 

    If your servicer has demanded that you return to repayment on a Sweet-eligible loan, please fill out our Return to Repayment Survey so that we can raise this issue with the Departments of Education and Justice.

  • If you are a Class Member (in the automatic relief or decision group) you will not owe any interest on your Direct or FFEL loans for the period between final approval and the date you receive your discharge or final decision. During that time, you may see interest appear on your account. This is due to internal Department of Education processes. Any interest that appears during this time will ultimately be removed even if, for decision group Class Members, your application is eventually denied.

    If you are a Post-Class Applicant who elects to remain in a borrower defense forbearance, interest will accrue on your loans while you await a decision. If your borrower defense application is ultimately approved, that interest will be discharged, subject to applicable regulations. If your application is denied, the interest will remain on your account.

    The Sweet litigation cannot prevent interest from accruing on private loans. If you’re not sure whether you have private loans, you can call your servicer and ask, or you can cross-reference your credit report with your Federal Student Aid (FSA) information.

Details of the Settlement for Different Types of Loans 

  • If you receive Full Settlement Relief under any of the settlement provisions described above, then the Department will cancel all remaining balances on the federal student loans that were the subject of your borrower defense application(s). Cancellation of outstanding loans and deletion of credit tradeline associated with these loans will happen regardless of what type of loan you have. 

    However, whether you receive a REFUND of payments made, and in what amount, will differ depending on the type of loans you have.

    See below for which types of payments will be refunded:

    DIRECT LOANS

    Direct Loans are federal student loans that are originated by and held by the Department of Education. Any payments you made on Direct Loans that were the subject of your BD claim(s) will be refunded.

    FFEL AND FFELP LOANS

    FFEL and FFELP loans are considered “federal student loans” for purposes of the settlement. This means that, if you are entitled to relief through the settlement, any FFEL and FFELP loans that were the subject of your BD claim(s) will be canceled. However, you may not be entitled to a refund of payments made on your FFEL(P) loans.

    There are two types of FFEL(P) loans: some are held by the government, and some are held by private bank lenders. Loans held by private bank lenders are known as “commercially held FFELs.”

    Although both are considered “federal loans” because they were authorized by federal law, payments that you made on commercially held FFEL loans were made to bank lenders, not to the Department of Education. For that reason, such payments will not be included in any refund you receive under the Sweet settlement, because the Department of Education does not have the legal authority to refund payments made to commercial lenders.

    Please note that some companies service multiple kinds of loans. For example, Navient can service Direct, FFEL, and/or private loans. Therefore, knowing that you have loans with Navient (or another servicer) is not an indication of the type of loans you have.

    If you’re unsure whether you have Direct or FFEL loans, or whether your FFEL loans are commercially held, please visit the National Consumer Law Center’s Student Loan Borrower Assistance page for helpful resources on figuring out what kind of loans you have. If you want to find out who your federal loan servicer is, click here. If you’re unsure whether your loans are private, you can call your servicer and ask, or you can cross-reference your credit report with your Federal Student Aid (FSA) information.

    CONSOLIDATION LOANS

    Please see the FAQ below for details about what will happen under the settlement for various types of consolidation loans.

    You do not need to consolidate your loans, including FFEL(P) loans, in order to get Sweet relief. The Department has committed to taking all steps necessary to deliver settlement relief. Class Members and Post-Class Applicants will not have to consolidate their loans or take any other steps to receive the relief they are entitled to.

    PRIVATE LOANS

    The settlement does not apply to private loans.

    If you paid off your federal student loans by refinancing into a private lender (such as SoFi, Earnest, or CommonBond), you will not get a refund on the refinanced amount, and you will still have to pay your private lender.

    PERKINS LOANS

    The settlement does not apply to Perkins loans. If you have both Perkins loans and Direct and/or FFEL(P) loans, you are only eligible for settlement relief on your Direct and/or FFEL(P) loans.

    PARENT PLUS LOANS

    In order to get settlement relief relating to Parent Plus loans, a parent must have applied for borrower defense separately from their child (the student), even if the student is already included in the class.

    If you are a parent borrower, and you applied for borrower defense to repayment of a Parent Plus loan on or before June 22, 2022, you are a member of the class. If you applied for borrower defense for a Parent Plus loan after June 22, 2022, and before November 16, 2022, you are a Post-Class Applicant.

    Parent borrowers can and should apply for borrower defense if they have not already, even though the time has passed to receive any benefit related to the settlement. Parent borrowers can apply for borrower defense here. For an informational guide on applying for borrower defense, click here. In their applications, parents should specify that they are applying in relation to the loan they took out for the school that the student attended, and they should detail the school misconduct that the student experienced.

  • If you previously consolidated your federal student loans into a Direct Consolidation Loan or a FFEL Consolidation Loan (which allow you to combine multiple federal loans into one), then you will still get the settlement relief to which you would otherwise be entitled if you hadn’t consolidated. You can see whether you have a Direct Consolidation Loan or FFEL Consolidation Loan by logging into your account with Federal Student Aid or your federal loan servicer. 

    If you consolidated loans from more than one school into a Direct Consolidation Loan or FFEL Consolidation Loan, and your borrower defense application relates to only one (or less than all) of those schools, then any settlement relief you receive will apply to the portion of your consolidation loan that relates to the school(s) named in your borrower defense application(s). The Department of Education should have data that will allow them to determine what part of your consolidation loan is connected to the school(s) for which you applied for borrower defense and are receiving settlement relief.  

    If you are currently having problems with your servicer related to billing on a Direct or FFEL Consolidation Loan that includes Sweet-eligible loans, please fill out our Return to Repayment Survey.

    If you previously consolidated your federal student loans into a private consolidation loan – for example, with a lender such as SoFi, Earnest, or CommonBond – then you will receive some settlement relief In certain circumstances.  If you refinanced Direct Loan(s) or government-held FFEL loan(s) with a private refinancer AFTER you applied for borrower defense with respect to those loans, then you WILL get a refund of the amount paid to the government by the refinancer. However, you will still owe your private lender any outstanding balance that you have with that lender, and the refinanced loan will continue to appear on your credit report unless and until it is paid off. (The Department of Education does not have the legal authority to discharge loans that are currently held by a private lender, even if those loans were originated as federal loans.) If you refinanced with a private lender BEFORE you applied for borrower defense, then you will not receive settlement relief.

  • First, you do not have to consolidate any of your loans in order to receive Sweet relief. If anyone tries to tell you otherwise, it could be a scam.

    If you want or need to consolidate your current federal loans for another reason (such as enrollment in an income-driven repayment plan or Public Service Loan Forgiveness), you can consolidate into a federal Direct Consolidation Loan. If you are a Class Member or a Post-Class Applicant, federal consolidation will not change the relief you are eligible for under the Sweet settlement.

    Consolidating any federal loans into a private loan (with a lender such as SoFi, Earnest, or CommonBond or, for example, a private loan with Navient) could waive certain rights you have with respect to your federal loans. The National Consumer Law Center warns, “It is dangerous to consolidate federal loans into a private consolidation loan. If you consolidate into a private loan, you lose the rights you have under the federal loan program, including rights to cancel or reduce your loan payments. Private lenders may even offer you bonuses if you agree to consolidate with them, but this may not be the right choice for you. Read the fine print!”

Interaction of Sweet With Other Discharges/Benefits 

  • No, you cannot get credit toward PSLF if you are in borrower-defense-related administrative forbearance. If you want to keep making qualifying payments toward PSLF, you can opt out of administrative forbearance by contacting your loan servicer and telling them that you want to resume payments under a qualifying PSLF payment plan. If you end up receiving Sweet relief before your PSLF is granted, you should receive a refund of any amounts paid to the Department of Education toward Direct or Direct Consolidation loans, including a refund of prior qualifying PSLF payments. (This does not include refunds of payments on commercially held FFEL loans.)

  • On June 1, 2022 – shortly before the parties in the Sweet case reached a settlement – the Department announced that it would cancel all outstanding loans related to Corinthian schools, including for people who had not already applied for borrower defense.

    Class Members who applied for borrower defense for their Corinthian-related loans will have their loans discharged through the Corinthian group discharge process announced by the Department of Education on June 1, 2022. These individuals will receive the same relief as other Class Members in the automatic discharge group (full discharge, refunds of payment to the Department, and deletion of the credit tradeline), but they will receive their relief according to a different schedule.

    If you are a Class Member who attended one of these schools before Corinthian ownership, your application will be placed into the decision group, and you will receive a decision within the applicable time frame.

    If you are a Post-Class Applicant who attended Everest, Heald, or Wyotech, you will receive relief through the Corinthian group discharge process and will not have to wait for a decision on your BD application.

    If you are a Corinthian borrower who has not yet received a discharge of your Corinthian loans, we are interested in hearing from you. Please visit our Get Help page.

  • If you are a Class Member, the Department of Education’s announcements about ITT, Westwood, and certain CollegeAmerica students receiving cancellation of their federal student loans do not change the relief that you will receive. Because ITT, Westwood, and CollegeAmerica are all on the settlement agreement’s Exhibit C list, you are still considered part of the automatic discharge group and you should have received Full Settlement Relief by January 28, 2024. If you still have not received Full Settlement Relief, please let know by filling out the Relief Survey.

    If you are a Post-Class Applicant and you are eligible for the ITT, Westwood, or CollegeAmerica group discharge, you should receive relief through the Department’s group discharge process for your school and will not have to wait for a decision on your BD application. If you are a Post-Class Applicant who has not yet received a discharge of your ITT, Westwood, or CollegeAmerica loans, we are interested in hearing from you. Please visit our Get Help page.

  • Some Class Members may currently be receiving assistance from SNAP/Food Stamps, Social Security, or similar public benefits programs. If you are getting public assistance and you receive a refund, you should be aware that the refund may impact your eligibility for benefits. Eligibility is different depending on the type of benefits you receive, whether it is state or federal, and which state you live in.

    You can visit the National Academy of Elder Law Attorneys (NAELA) for assistance. NAELA attorneys, although specializing in legal issues for those who are 65 and older and/or are disabled, have experience in and information on how refunds like this can affect eligibility for public assistance. Lastly, you can look here to find your local legal aid office.

  • Under the American Rescue Plan Act of 2021, all student loan discharges are federally tax-free until 2025. That includes discharges under this settlement. However, if your loans are discharged after January 1, 2026, even pursuant to the Sweet settlement, there may be federal income tax implications and you should consult with a tax advisor, unless Congress extends the tax exemption beyond 2025.

    If you are a Post-Class Applicant and you receive student loan cancellation after January 1, 2026, your discharge should still be federally tax-free under IRS Revenue Procedure 2015-57, which provides that the IRS will not assert that federal student loans discharged under the borrower defense to repayment process qualify as recognizable gross income. As always, you should consult with a tax advisor.

    State income tax policies with respect to student loan discharges may vary. If you have questions about state income taxes, we recommend that you seek out resources from your state of residence and contact a tax advisor.

  • The Sweet settlement does not reinstate GI benefits applied to attend the school that was the subject of your borrower defense application.

    The U.S. Department of Veterans Affairs has information on the restoration of benefits after school closure, or if a school is disapproved for GI Bill benefits, here.

  • The Sweet settlement itself does not have a specific provision for Pell eligibility restoration. However, Class Members and Post-Class Applicants who receive settlement relief may be eligible for full or partial restoration of Pell eligibility under a new law that goes into effect on July 1, 2024.

    This law, which is part of the FAFSA Simplification Act, restores Pell eligibility for any period in which a student received a federal student loan that was later discharged under the Secretary of Education’s authority to “compromise, waive, or release” a loan obligation—a legal provision which forms the basis for settlement relief.

Class Membership Troubleshooting 

  • To ensure that you continue to receive timely information about the settlement, please update your contact information in your Federal Student Aid (FSA) profile. Log in to your account and navigate to the “Settings” page under your email address, phone number, or address. This is how the Department of Education will determine where to send you information and any potential refunds. For more information, visit the FSA’s help center page on this matter.

    You should also make sure to keep your servicer up to date regarding your contact information. If you’re not sure who your servicer is, this FSA webpage explains and helps you identify your servicer.

  • PPSL is aware of the problems with the BD application website, and we have raised this concern with the Department of Education. We want to know more. If you had trouble with the online BD application, please let us know about your experience here.

    Your responses will help us ensure that every borrower who started their application on or before June 22, 2022, is counted as a Class Member, and that every borrower who started their application between June 22, 2022, and November 16, 2022, is counted as a Post-Class Applicant.

  • PPSL is aware of this issue, and we have raised it with the Department of Education. We want to know more. If you applied for borrower defense but have had trouble tracking your application, or have experienced errors in the Department’s record-keeping, please let us know about your experience here.

    Your responses will help us ensure that every borrower who applied for BD is confirmed in the correct class status. You should also reach out to Federal Student Aid’s ombudsman’s office.

  • The class is represented by two non-profit legal services organizations that provide free legal services, the Project on Predatory Student Lending (PPSL) and Housing & Economic Rights Advocates. To contact PPSL, you should complete the form in the Get Help tab at the top of the webpage. If you cannot fill out the form, you may call 617-390-2574. Please note, we cannot provide individual legal advice. Please note that due to the high volume of communications we receive, all communications are reviewed but we are not always able to respond.