A student loan borrower legal group filed a new lawsuit last week against the Education Department, demanding information and records on the status of group discharges for federal student loans. The department, the lawsuit argues, promised to discharge more than $23 billion in student loans for 1.5 million borrowers, but it has released minimal information on the progress of these discharges. Meanwhile, borrowers have been reporting that while they received approval to have their student loans wiped out, their loan balances remain on the books.
“The Department made public promises to more than 1.5 million borrowers,” said Eileen Connor, President and Executive Director of the Project on Predatory Student Lending, the organization that filed the suit, in a statement last Tuesday. “It shouldn’t take a lawsuit to learn whether those promises have been fulfilled. Borrowers and the public have a right to know whether the Department has delivered the relief it announced.”
Here are the details on the latest legal challenge the department is facing related to forgiving student loans, and what borrowers should know.
Education Department Had Promised To Discharge Student Loans Automatically On Group Basis
The lawsuit centers on a series of announcements made by the Education Department over a three-year period that borrowers who had attended certain schools during specific periods would have their student loans automatically discharged. The discharges were group discharge approvals under Borrower Defense to Repayment, a program that allows borrowers to request that their student loans be forgiven on the basis of school misconduct. Under the group discharge announcements, borrowers could qualify for student loan relief even if they never formally submitted a Borrower Defense application.
“Between April 2022 and January 2025, the Department of Education announced ten group discharges for borrowers who attended schools that it determined had engaged in widespread misconduct,” explained the Project on Predatory Student Lending in its statement last week. “In each announcement, the Department identified misconduct by the schools, stated that approved borrowers would automatically receive federal student loan discharges and any other applicable relief, and told borrowers they did not need to take any further action.”
The group discharges differ from the relief provided under the Sweet v. Cardona settlement. While the Sweet v. Cardona settlement also involved the Borrower Defense to Repayment program, that relief was related to the department’s failure to timely adjudicate tends of thousands of Borrower Defense applications. The group discharges, on the other hand, are blanket approvals for student loan relief for borrowers who attended certain schools during specific periods, regardless of whether or not they formally submitted a Borrower Defense application.
Group Discharge Announcements For Federal Student Loans Still On Education Department Website
Many of these student loan relief announcements are still on the Education Department’s website for group discharges under Borrower Defense to Repayment. The announcements explain the basis for the group discharges and outlines who is eligible to have their student loans cancelled.
“The U.S. Department of Education (ED) announced that borrowers who enrolled in Ashford University (Ashford), now known as the University of Arizona Global Campus, between March 1, 2009, and April 30, 2020, will receive 100% discharges of their eligible federal student loans,” says one such group discharge announcement from January 15, 2025. “Approximately 261,000 borrowers will have approximately $4.5 billion in loans discharged automatically.”
“The U.S. Department of Education (ED) announced that borrowers who enrolled at any Center for Excellence in Higher Education (CEHE) school between Jan. 1, 2006, and Aug. 1, 2021, will receive 100% discharges of their eligible federal student loans,” says another announcement from January 13, 2025. “This covers borrowers who attended Independence University, CollegeAmerica, Stevens-Henager College, and California College San Diego. Approximately 73,600 borrowers will have $1.15 billion in loans discharged automatically.”
Nearly all of the announcements include similar language saying that borrowers do not have to take any action to get their student loans discharged.
“This group discharge will provide relief to borrowers harmed by CEHE’s actions, including borrowers who have not yet applied for borrower defense,” said the department in the announcement of the CEHE-related relief. “Borrowers do not need to take any action to receive their discharge.”
The Project on Predatory Student Lending noted in its statement last week that the Education Department’s group discharge announcements also referenced Marinello Schools of Beauty, Corinthian Colleges, ITT Technical Institute, Westwood College, CollegeAmerica, the Art Institutes, Drake College of Business, and certain Lincoln Technical Institute programs, all of which the department accused of engaging in “widespread misconduct.” Many of the schools disputed the allegations.
Lawsuit Seeks Records To Determine If Student Loans Are Actually Being Discharged
The new lawsuit filed last week by the Project on Predatory Student Lending doesn’t immediately seek to compel the Education Department to cancel federal student loans for covered borrowers in accordance with the earlier group discharge announcements. Instead, the organization is trying to force the department to provide information and records on discharge processing. The department, the group argues, has failed to comply with its previous requests under the Freedom of Information Act, or FOIA.
“PPSL continues to hear from hundreds of borrowers who are approved for these group discharges but whose federal student loans remain outstanding,” said the group in its statement last week. “PPSL submitted its first five FOIA requests in November 2023, seeking records related to the Department’s implementation of group discharges,” followed by 10 additional FOIA requests in April 2025.
“The Department acknowledged receiving all fifteen requests but has failed to make determinations or produce responsive records, despite the deadlines established by FOIA and the passing of the agency’s own estimated processing timeline,” said PPSL in its statement.
“Since the announcements, ED has not publicly released any data or other information about its progress toward fulfilling these commitments to borrowers,” said PPSL in its formal complaint filed last week in federal District Court for the District of Massachusetts. “ED has failed to make a final determination or production of records in response to the requests within the time prescribed by FOIA.”
The lawsuit seeks a court order to force the Education Department to disclose information and records “relating to ED’s process of effectuating the Group Discharges.” If PPSL can obtain those records, the organization may be able to better determine whether or not eligible borrowers are actually getting their student loans discharged. If the discharges aren’t being processed, PPSL could potentially explore taking further legal action.
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