Quick Answer: The Ninth Circuit Court of Appeals unanimously rejected the U.S. Department of Education’s emergency request to delay student loan discharges for approximately 205,000 borrowers under the Sweet v. McMahon settlement on March 25, 2026. Borrowers who attended schools on the approved list (Exhibit C) should receive discharge notices by next week. All other eligible post-class applicants should receive notices by April 15, 2026. Relief includes full loan discharge, refunds of past payments, and credit report corrections. (See: the April 2026 borrower defense deadline.)
Update (July 2026): The Ninth Circuit has now issued its final ruling and rejected the Department’s appeal entirely. Read what the July 17, 2026 ruling means and why the 170,000 and 205,000 figures aren’t the same thing.
Expert Context: I’ve tracked federal student debt relief programs since their creation, including watching multiple administrations change the rules mid-stream. This is the third loss for the Education Department in this case in a matter of weeks. When a federal appeals court unanimously tells the government “the time for negotiating is over,” that’s as definitive as it gets. These borrowers were defrauded by their schools, applied for relief years ago, and have been waiting while the government ran out the clock. The clock just ran out on the government instead.
What the Ninth Circuit Ruled
On March 25, 2026, a unanimous three-judge panel of the Ninth Circuit Court of Appeals denied the Education Department’s emergency motion to delay settlement relief while its appeal is pending. The court’s language was unambiguous:
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“The DOE can point to no changed circumstances that render it inequitable to apply the same settlement agreement that it bargained for years ago. The DOE knew by February 27, 2023, over three years ago, that the Post-Class Applicant group totaled over 205,000 people.”
During oral arguments the previous week, one of the Ninth Circuit judges told the government’s attorney directly: “The time for negotiating is over.”
Background: Sweet v. McMahon and Borrower Defense
Key Terms Defined
Borrower Defense to Repayment: A federal program that allows student loan borrowers to seek discharge of their loans if they can demonstrate that their school engaged in certain misconduct, such as misrepresenting job placement rates or admissions selectivity.
Sweet v. McMahon settlement (2022): A court-approved agreement between the Education Department and a class of hundreds of thousands of borrowers that provided for automatic loan discharge for those who applied for Borrower Defense relief and attended schools on an approved list (Exhibit C).
Post-class applicants: Borrowers who submitted Borrower Defense applications between June 2022 (when the settlement was finalized) and November 2022 (when it was officially approved). Under the settlement, the DOE had until January 28, 2026 to review their applications. Failure to decide by that date entitled them to full automatic relief.
The Education Department missed its January 28, 2026 deadline to review the applications of more than 200,000 post-class borrowers. Despite having a three-year window, the Department only adjudicated a small portion of the applications. Two separate district court judges largely rejected the Department’s requests for extensions, and now the Ninth Circuit has affirmed those decisions.
What Eligible Borrowers Should Expect
According to the Project on Predatory Student Lending (PPSL), the legal organization that has represented borrowers in this case for nearly a decade:
- Post-class applicants from Exhibit C schools who did not receive a decision by January 28, 2026 are entitled to full settlement relief
- Discharge notices from the Education Department should arrive by approximately April 1, 2026 for Exhibit C school borrowers
- All other post-class applicants should receive notices by April 15, 2026
- The Department has one year from that point to complete all discharges, refunds, and credit corrections
Settlement relief includes:
- Full discharge of applicable federal student loans
- Refunds of past payments made on those loans
- Deletion of negative credit reporting associated with the discharged loans
Myth: “The government can just keep delaying student loan relief forever.”
Reality: The government entered into a legally binding settlement agreement in 2022. When it missed its own deadline and asked for more time, three separate courts — two district judges and now the Ninth Circuit — said no. The settlement is a contract. The borrowers held up their end by filing applications. The government didn’t hold up its end by reviewing them in time. The consequence, as the settlement always provided, is automatic relief.
What to Do If You Think You’re Eligible
- Check your status: Log in to StudentAid.gov to verify your loan status and whether you submitted a Borrower Defense application before November 2022.
- Watch for notices: The Department of Education should send formal notices to eligible borrowers starting next week. Check your email (including spam folders) and StudentAid.gov dashboard.
- Don’t pay anyone for help: This relief is automatic under the settlement. No company can speed it up or get you access you don’t already have. Federal student loan programs are free at StudentAid.gov.
- If you have questions: The Project on Predatory Student Lending has been representing Sweet v. McMahon borrowers and maintains updated information on the settlement.
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The Bottom Line
The Ninth Circuit has unanimously shut down the Education Department’s last attempt to delay student loan discharges for 205,000 borrowers who were defrauded by their schools. Discharge notices should begin arriving next week for Exhibit C school borrowers and by April 15 for all other eligible post-class applicants. Relief includes full loan discharge, payment refunds, and credit report corrections. The Department has one year to complete the process. This is automatic — eligible borrowers don’t need to do anything except watch for their notice.
Frequently Asked Questions
Who qualifies for automatic student loan discharge under Sweet v. McMahon?
Post-class applicants who submitted a Borrower Defense to Repayment application between June 2022 and November 2022, attended a school on the settlement’s approved list (Exhibit C), and did not receive a decision from the Education Department by January 28, 2026. The settlement also covers class members who applied before June 2022 and attended Exhibit C schools.
When will borrowers receive their student loan discharge?
According to the Project on Predatory Student Lending, borrowers who attended Exhibit C schools should receive formal notices from the Education Department by approximately April 1, 2026. All other eligible post-class applicants should receive notices by April 15, 2026. The Department then has one year to complete all loan discharges, refunds of past payments, and credit report corrections.
Do I need to apply for the Sweet v. McMahon discharge?
No. If you already submitted a Borrower Defense application before November 2022 and meet the eligibility criteria, the discharge is automatic under the settlement terms. You do not need to file a new application or take any additional action. Watch for a notice from the Education Department confirming your eligibility.
Will I get a refund of payments I’ve already made?
Yes. The settlement provides for refunds of prior payments borrowers made on discharged loans, as well as deletion of negative credit reporting associated with those loans. The timeline for receiving refunds is within one year of the discharge notice.
What is the Exhibit C school list?
Exhibit C is an approved list of more than 100 educational institutions identified in the Sweet v. McMahon settlement agreement. Borrowers who attended these schools and submitted Borrower Defense applications during the relevant period are entitled to automatic relief. The list includes schools that were found to have engaged in misconduct such as misrepresenting job placement rates or admissions selectivity.
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