A federal judge has rejected a request by the Department of Education to delay student loan forgiveness decisions for more than 200,000 borrowers, marking a significant development in a long-running legal fight over disputed student loans.
The ruling stems from Sweet v. Cardona, a class action lawsuit brought by student loan borrowers who claim the federal government improperly stalled or denied applications under the Borrower Defense to Repayment program.
That program allows borrowers to seek loan forgiveness if their school misled them about costs, job prospects, or other key factors.
Under a settlement reached in 2022, the Education Department agreed to forgive loans for certain borrowers and set deadlines for reviewing pending claims.
One group of borrowers, known as Post Class Applicants, must receive decisions by January 28, 2026, or their loans are automatically discharged.
Last month, the department asked the court for an 18-month extension, arguing it lacked the staff and resources to finish reviewing roughly 200,000 remaining applications by that deadline.
The judge overseeing the case rejected that request.
“The student loan has been hanging over their head for how many years, how many decades, wrecking their credit,” U.S. District Judge William Alsup said during a hearing. “It’s just not right.”
Eileen Connor, president of the Project on Predatory Student Lending, which represents borrowers in the case, welcomed the ruling.
“The court sent a clear message today: borrowers deserve fair, timely decisions, not years of uncertainty,” Connor said. “This is a critical victory for people who have waited far too long for justice and relief.”
The Sweet settlement was designed to resolve claims that the Education Department failed to properly process Borrower Defense applications during the first Trump administration, sometimes leaving borrowers waiting for years.
Borrowers argued that some applications were denied without meaningful review.
Under Judge Alsup’s ruling, the department must meet the January 2026 deadline for Post Class Applicants who attended schools on a court-approved list.
All remaining applications must be processed by April 15, 2026.
Connor warned of serious harm from further delays.
“This delay is not harmless,” she said. “Hundreds of thousands are suffering real consequences every day they are forced to wait with fraudulent loans hanging over their heads.”
The decision comes as student loan forgiveness programs face increased scrutiny.
The Trump administration and congressional Republicans have moved to roll back or limit borrower-friendly policies, including newer rules governing Borrower Defense claims and income-driven repayment plans.
Despite that debate, the court made clear that the Sweet settlement deadlines remain binding.
