Sweet v. McMahon Settlement Update: Automatic Loan Discharge After Missed 2026 Deadline

Updated on February 27, 2026

Automatic relief has been triggered for thousands of borrowers under the Sweet v. McMahon settlement after the U.S. Department of Education (the Department) missed its January 28, 2026, deadline.

If you filed a Borrower Defense application between June 23 and November 15, 2022, and did not receive a decision on time, the settlement entitles you to Full Settlement Relief.

Federal courts rejected the Department’s attempts to delay enforcement, and the agreement remains binding unless a higher court issues a stay.

The Department Missed the January 28, 2026 Deadline

For post-class borrowers whose schools appear on Exhibit C, the decision deadline was January 28, 2026. The Department did not issue decisions for roughly 170,000 of those borrowers.

The Department asked the court twice to extend that deadline. On December 11, 2025, the court denied the first request. On February 24, 2026, the court denied the second request, citing Pioneer Investment Services Co. v. Brunswick Associates, 507 U.S. 380, 393 (1993), which requires “extraordinary circumstances” to justify relief from a court-ordered deadline. The court found none.

One day earlier, on February 23, 2026, the U.S. Supreme Court declined to review a separate challenge filed by Everglades College, Inc. The Ninth Circuit had already dismissed appeals filed by three of the original intervenors in November 2024.

Because the deadline passed without timely decisions, the settlement’s automatic relief provision was triggered for affected Exhibit C post-class borrowers.

Who Qualifies for Automatic Relief

You are a post-class applicant if you submitted a Borrower Defense application between June 23 and November 15, 2022.

There are two groups within that window:

Exhibit C schools — the deadline was January 28, 2026.
Non–Exhibit C schools — the deadline is April 15, 2026.

The official Exhibit C school list is filed with the court and available through ppsl.org.

When the Department does not issue a decision by the applicable deadline, the automatic relief provision applies.

Borrowers whose applications were pending as of June 22, 2022, were part of the original class. Those who applied after November 15, 2022, are not covered by the settlement — their applications are processed under current Borrower Defense regulations.

What Full Settlement Relief Includes

If the Department fails to issue a timely decision, the borrower automatically receives Full Settlement Relief.

Full Settlement Relief includes:

Discharge of federal student loans is tied to the school named in the Borrower Defense application.
Refund of payments made to the federal government on those loans, including Direct Loans and federally held FFEL loans.
Deletion of negative credit reporting associated with those loans.
Restoration of federal student aid eligibility, if it was lost.

Payments made on commercially held FFEL loans that were never federally owned may not be refundable. If those loans were later consolidated into Direct Loans, the discharge applies to the consolidated balance.

Related: What Is an FFEL Loan?

Once relief is triggered:

The Department must send a written notice within 60 days of the missed deadline.
The Department must complete discharge, refunds, and credit corrections within one year of that notice.

No additional application or lawsuit is required to activate relief.

What to Do Based on Your Status

Your next step depends on your situation.

If You Are an Exhibit C Post-Class Applicant and Received No Decision by January 28, 2026

Automatic relief has already been triggered.
Confirm your contact information at StudentAid.gov.
Save documentation showing your application was pending as of January 28, 2026.
Monitor for written notice from the Department.
Watch your loan account for balance adjustments.
If your case does not appear in your portal, email sweet@ed.gov and copy info@ppsl.org with your name and application number.

If You Are a Non–Exhibit C Post-Class Applicant

The deadline is April 15, 2026.

If the Department does not issue a decision by that date, the same automatic relief applies. If you receive a denial before April 15, the reconsideration process described below still applies.

If You Received a Denial

A denial does not end the process.

Check your Federal Student Aid portal for a Request Reconsideration option.
If no button appears, email sweet@ed.gov requesting reconsideration.
Compare the denial to your original application and identify factual errors.
Forward the denial to info@ppsl.org with the subject line: “Sweet post-class denial.”

If You Received an Approval

The Department must complete discharge, refunds, and credit corrections within one year of your approval notice.

Refunds typically arrive from the U.S. Department of the Treasury and may be issued in multiple payments.

If relief is not completed within one year, email sweet@ed.gov and copy info@ppsl.org.

If You Applied After November 15, 2022

You are not part of the post-class group. Automatic relief does not apply.

What Happens If the Department Misses Future Deadlines

The Sweet v. McMahon settlement is a federal court order. If the Department fails to send required notices or complete relief within the one-year window, class counsel — the Project on Predatory Student Lending — may file a motion to enforce the settlement or seek contempt remedies. Individual borrowers do not need to file separate lawsuits. The court retains jurisdiction to compel compliance.

An appeal does not cancel the settlement. The deadlines remain binding unless a higher court issues a stay.

Timeline of Key Events

June 22, 2022 — Settlement reached in Sweet v. Cardona (later captioned Sweet v. McMahon).
June 23 – November 15, 2022 — Post-class Borrower Defense window.
November 16, 2022 — Court grants final approval.
November 5, 2024 — Ninth Circuit dismisses appeals filed by three of the original intervenors.
December 11, 2025 — Court denies the Department’s first extension request.
January 28, 2026 — Exhibit C deadline missed.
February 23, 2026 — U.S. Supreme Court declines review.
February 24, 2026 — Court denies second extension request.
April 15, 2026 — Non–Exhibit C deadline.
Within one year of written notice — Discharge and refunds must be completed.

Resources and Where to Get Help

Sweet settlement contact (Department of Education): sweet@ed.gov
Project on Predatory Student Lending (PPSL): info@ppsl.org
Borrower Defense Hotline: 1-855-279-6207
Federal Student Aid portal: studentaid.gov
Court case: Sweet v. McMahon, No. 19-cv-3674 (N.D. Cal.)

FAQs

What happens if the Department missed the January 28, 2026 deadline?

Exhibit C post-class borrowers who did not receive a decision by January 28, 2026 receive Full Settlement Relief automatically. The Department must send notice within 60 days and complete discharge and refunds within one year of that notice.

Am I a post-class applicant?

You are a post-class applicant if you submitted a Borrower Defense application between June 23 and November 15, 2022. If your application was pending as of June 22, 2022, you were part of the original class.

Will I receive a refund of payments I already made?

Full Settlement Relief includes refunds of payments made to the federal government on covered Direct Loans and federally held FFEL loans. Commercially held FFEL payments may not be refundable unless the loans were later federally consolidated.

Does this settlement cover private student loans?

No. The Sweet v. McMahon settlement applies only to federal student loans, including Direct Loans and federally held FFEL loans. Private student loans are not covered, regardless of when you applied or which school you attended.

Can the Department’s appeal stop the settlement?

An appeal alone does not pause the settlement. The agreement remains enforceable unless a higher court issues a stay suspending the deadlines.