A federal appeals court rejected the U.S. Department of Education’s bid to delay decisions in borrower defense cases, keeping the government on track with obligations under the Sweet v. McMahon settlement. The dispute centers on thousands of student borrowers seeking debt relief tied to alleged misconduct by their institutions. The Department of Education had sought an 18-month extension for tens of thousands of pending decisions—citing slow progress against an earlier Jan. 28 deadline. The court found the agency failed to demonstrate changed circumstances sufficient to modify the settlement. As of April, the Education Department reported it had discharged or refunded $12 billion for nearly 300,000 borrowers, but the ruling still requires additional relief for more than 170,000 borrowers, according to the Project on Predatory Student Lending, which represents affected borrowers. The Education Department did not comment by publication time, but the decision signals that implementation timelines for relief mechanisms are increasingly constrained by judicial oversight—directly affecting institutional risk management and compliance strategies tied to federal aid.
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