The Biden administration agreed to cancel $6 billion in student loans for around 200,000 defrauded student borrowers as part of a class-action lawsuit settlement.
The Sweet v. Cardona class-action lawsuit claimed that millions of students borrowed federal student loans to attend one of more than 150 majority for-profit colleges, including ITT Technical Institute, Corinthian Colleges, the Art Institutes, Salter College and Brooks Institute of Photography. The suit states that the schools falsely promised students high-paying jobs, state-of-the-art vocational training, and long and fulfilling careers.
After a U.S. Department of Education investigation revealed that sensational post-grad employment claims were made by some of the institutions, the suit stated borrowers attempted to recover their loans through the U.S. Department of Education Borrower Defense to Repayment program — a key student loan forgiveness program. The program “unreasonably delayed and unlawfully withheld decisions on pending relief claims,” the suit stated, preventing student borrowers from receiving loan forgiveness.