450k borrowers say they were ripped off. Their student loans are being erased
A long-running class-action lawsuit involving 450,000 federal student loan borrowers is concluding with the erasure of their debts. The case centered on the 'borrower defense' rule, which allows for loan discharge if colleges defrauded students regarding job prospects or salary expectations.
Why it matters
This represents the largest settlement against the U.S. government, providing $23 billion in relief and setting a precedent for holding predatory educational institutions accountable.
Catch up on what you missed with our Education newsletter, sent weekly.
The long legal battle to erase the debts of nearly half a million federal student loan borrowers who say they were defrauded by their colleges is finally coming to an end, after a recent court ruling in a lawsuit that has spanned three presidential administrations.
The class-action suit, originally filed against the first Trump administration seven years ago, centered on a federal rule known as borrower defense . The rule is supposed to allow borrowers to petition the U.S. Education Department to erase their debts if a school has lied to them – about things like their job prospects, their credits' transferability or their likely salary after graduation.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in