The Education Department filed a last minute request on Thursday to extend the time window to process student loan forgiveness applications for tens of thousands of borrowers, just days before a key settlement deadline. The request was filed only a few weeks after a federal judge had largely rejected a similar request made by the department.
The new development is just the latest chapter in the long-running saga involving the Sweet v. Cardona (now Sweet v. McMahon) settlement agreement. That settlement, which was approved in 2022, resolved a long-running class action lawsuit that student loan borrowers had originally brought over problems with the Borrower Defense to Repayment program, which offers student loan forgiveness to those who were harmed by certain forms of school misconduct (such as fraud and misrepresentations about key elements of a degree program). The class of borrowers had alleged that the Education Department had unlawfully stalled or delayed processing thousands of Borrower Defense applications or issued arbitrary denials, leaving many borrowers in limbo for years or saddled with unaffordable student loans.
Under the terms of the 2022 settlement, which was approved by a federal judge, the Education Department was to complete its review of the final group of Borrower Defense applications by the end of this week. In December, the Trump administration asked for an abrupt 18-month delay, but the court largely rejected this request after a subsequent hearing. Last Thursday, the department filed a motion asking the court to reconsider its decision.
“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,” said the Project on Predatory Student Lending, the organization representing student loan borrowers in the Sweet case, in a statement last week. “On January 23, 2026, PPSL filed a response, arguing that the Department’s motion is an improper attempt to obtain ‘administrative’ relief and is not permitted by the local rules of the court. If necessary, PPSL will file a full response on the merits in the coming weeks.”
Here’s the latest, and what these new developments means for student loan forgiveness under the Sweet settlement.
Court Had Already Rejected Request To Delay Student Loan Forgiveness
The core issue in dispute is over the handling of “post-class applicants.” These are student loan borrowers who had submitted Borrower Defense to Repayment applications after the Sweet settlement agreement had been finalized, but before it was officially approved by the court. Under the terms of the Sweet settlement, the Education Department had agreed to approve student loan forgiveness for class members who submitted their Borrower Defense application by June 2022 and had attended one of dozens of institutions on an approved list of schools. Unlike class members, post-class applicants, defined as those who submitted their Borrower Defense applications between June 2022 and the court’s approval of the settlement in November 2022, would not be entitled to an automatic discharge, unless the Education Department failed to process their applications by January 28, 2026. That gave the department more than three years to review and process those requests and issue decisions on whether a borrower’s student loans were eligible for discharge.
The department abruptly asked the court in December for an 18-month extension to process Borrower Defense applications for post-class applicants. The department had argued that the “unanticipated size of the postclass pool,” coupled with “reasonable but unexpected resource constraints,” would make it impossible to review and process the remaining Borrower Defense applications by the January 2026 deadline. It is not clear if the Trump administration’s substantial reduction in the Education Department’s workforce last year, which reduced the department’s staff by approximately 50%, contributed to the issue.
The class of student loan borrowers opposed the department’s request, and the federal judge overseeing the case largely sided with borrowers in a ruling in December.
“The student loan has been hanging over their head for how many years, how many decades, wrecking their credit,” said Judge William Alsup during a hearing on the department’s request. “It’s just not right” to allow further delay.
Student loan borrowers “deserve fair, timely decisions, not years of uncertainty,” said Eileen Connor, President and Executive Director of PPSL, in a statement shortly after the Judge Alsup’s ruling. “This is a critical victory for people who have waited far too long for justice and relief.”
Education Department Asks Again To Delay Student Loan Forgiveness For 170,000 Borrowers
Despite the clear ruling in December, the Education Department filed a motion last week asking the court to reconsider its decision and grant a delay in student loan forgiveness processing for post-class Sweet applicants to the summer of 2027. By definition, all of these borrowers have already been waiting more than three years for a decision after submitting their Borrower Defense applications.
“Defendants respectfully request that the Court reconsider Defendants’ request that the deadline for providing final decisions to these non-class members be extended by eighteen months, until July 28, 2027,” said the department in its filing last Thursday on behalf of Secretary of Education Linda McMahon. “The post-class applicant pool turned out to be enormous. It exceeds by more than 200,000 the number of applications that were submitted in any comparable five-month period before or after the Settlement Agreement.” The department argued that it had no way of knowing that there would be so many student loan forgiveness applications to process when it entered into the Sweet v. Cardona settlement agreement in 2022.
The department argued that the court made “several manifest errors of law and fact” in directing the Trump administration to stick to the January 28, 2026 deadline for processing approximately 170,000 remaining Borrower Defense applications submitted by post-class applicants, including by allegedly treating post-class members as class members and assuming that the department would be capable of processing the remaining student loan forgiveness requests by the end of January 2026.
“The Department has on average completed about 1,500 adjudications per month,” says the filing. “Based on a similar number of adjudicators, the Court had found that it would take the Borrower Defense Branch ‘more than twenty-five years’ to adjudicate 443,000 applications.” The department argued that if the court maintains the January 2026 deadline, 170,000 borrowers could receive billions of dollars in student loan forgiveness automatically, a “windfall” for borrowers and an “extraordinary sum of taxpayer resources.”
Borrowers Respond To Request To Delay Student Loan Forgiveness
Attorneys representing student loan borrowers in the Sweet case quickly responded to the Education Department’s request to delay student loan forgiveness. But rather than rehashing the legal arguments that the court already considered and decided in December, the attorneys focused on several alleged procedural deficiencies in the department’s motion, such as its characterization of its request as “administrative” rather than substantive relief, in apparent violation of local court rules.
“Excusing Defendants from their voluntarily undertaken, court-approved, contractual obligation would not be a mere matter of the District Court’s administrative procedure, such as extending a page limit, but would instead be an alteration of a binding contract underpinning the final judgment in this case,” said PPSL in its initial opposition filing on Friday.
PPSL also noted several other alleged court rule violations in the department’s filing, including filing a 24-page brief when the court has a maximum 5-page limit for administrative requests, and its failure to include a proposed order or stipulation with its request. These violations alone, suggested PPSL, are grounds for denial. But the attorneys indicated they would also respond to the substantive arguments made by the Education Department.
“Plaintiffs intend to respond to the rest of Defendants’ Motion in due course according to the briefing schedule,” says the filing. The Plaintiffs had previously argued that any further extension of time for the department to adjudicate Borrower Defense claims for post-class applicants would be profoundly unjust.
“The government’s years-long failure to do what it promised to do does not negate a legally binding court ordered settlement deadline,” said Connor in a statement last month. “Borrowers filed this lawsuit more than 5 years ago on the basis of delay and neglect, and the Department of Education has had 3 years to issue decisions and discharges under the settlement.”
What Happens Next For Student Loan Forgiveness Under Sweet Settlement
The court has not yet ruled on the Education Department’s latest request to delay processing student loan forgiveness requests for the roughly 170,000 post-class applicants under the Sweet settlement. But for now, the department is still legally bound to adjudicate all remaining post-class Borrower Defense claims by the January 28, 2026 deadline.
“All Post-Class Applicants should receive a decision on their application by January 28, 2026,” maintains PPSL on its website.
Post-class applicants who are approved to have their student loans discharged through Borrower Defense should receive complete Sweet settlement relief. Under the terms of the settlement agreement, all other post-class borrowers are entitled to complete settlement relief (including student loan forgiveness, credit repair, and refunds of any past payments made) if the department misses the deadline.
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