Student Loan Class Action Lawsuits: Sweet, AFT, and Navient

Several class action lawsuits over federal student loans are active or recently settled, and whether one covers you depends on the school you attended, when you applied for relief, and which repayment plan or forgiveness program you were in. The largest by far is Sweet v. McMahon, which has delivered roughly $12 billion in loan cancellation and refunds to nearly 300,000 borrowers who were defrauded by their schools. Others include AFT v. Department of Education, covering borrowers stuck in income-driven repayment and Public Service Loan Forgiveness backlogs; Maldonado v. MOHELA, over a servicer’s failure to honor ordered discharges; and the Navient multistate settlement, which already paid out in 2022.

Sweet v. McMahon: The Borrower Defense Class Action

Filed in June 2019 in the Northern District of California, Sweet v. McMahon (originally Sweet v. DeVos) was brought by borrowers whose “borrower defense to repayment” applications had piled up at the Department of Education without decisions. Borrower defense is the federal program that lets students seek cancellation of their loans if their school defrauded them. By the time the case was filed, more than 200,000 applications were stalled, many from students of ITT Technical Institute, Corinthian Colleges, and the Art Institutes.¹

The settlement received final approval on November 16, 2022, with an effective date of January 28, 2023. It voided every borrower defense denial the Department had issued since December 2019 and required those claims to be reconsidered under the more borrower-friendly 2016 Borrower Defense Regulation.²

“Full Settlement Relief” under the agreement has three parts: discharge of the borrower’s outstanding federal loans tied to the school, a refund of any payments already made to the federal government on those loans, and deletion of the associated negative credit reporting.²

Who the Settlement Covers

Two groups are covered:

Class Members: borrowers who had a pending borrower defense application as of June 22, 2022, or whose December 2019 through October 2020 denials were rescinded. If you attended a school on the settlement’s “Exhibit C” list — ITT Tech, Corinthian Colleges, the Art Institutes, Salter College, Brooks Institute of Photography, and others — relief was essentially automatic. Borrowers who attended other schools went through a staggered “Decision Group” review.¹
Post-Class Applicants: borrowers who submitted borrower defense applications between June 23, 2022, and November 15, 2022. They weren’t original class members but were folded into the settlement, with the Department required to decide their claims by specific deadlines.²

Applications submitted after November 15, 2022 are not covered. Class members did not need to file anything separate; the settlement applied to applications already on file.²

Where Things Stand for Post-Class Applicants

Roughly 251,000 people submitted applications in the five-month post-class window — about 170,000 from Exhibit C schools and 20,000 to 30,000 from other schools. The Department was required to decide Exhibit C claims by January 28, 2026, and all other post-class claims by April 15, 2026.³

It missed both. By January 28, 2026, only about 60,000 of the 251,000 post-class applications had been adjudicated, leaving roughly 190,000 unresolved. Under the settlement’s automatic-relief clause, missed deadlines entitle each affected borrower to full loan discharge, refunds, and credit repair without further review.⁴

The Department fought that outcome and lost repeatedly. Judge William Alsup denied its request for an 18-month extension on December 11, 2025, and denied a second attempt at modification on February 24, 2026. The Ninth Circuit denied an emergency stay on March 25, 2026, with Judge Wardlaw telling the government’s lawyers at argument that “the time for negotiating is over.”¹ The panel found the Department had failed to show a likelihood of success on the merits.⁵ A full merits appeal is pending on an expedited briefing schedule.

As of June 2026, the Department is sending discharge notices to roughly 30,000 non-Exhibit C post-class borrowers whose applications weren’t decided by the April 15 deadline. Exhibit C post-class applicants who didn’t get a decision by January 28 were supposed to receive eligibility notices by March 29, 2026, with actual relief delivered within one year of that notice.³

The discharge notices carry a caveat: the timing is subject to the Ninth Circuit’s pending merits ruling.⁴ Every court to consider the issue so far has sided with borrowers.

How to Check Your Status

The Department typically notifies borrowers by email from noreply@studentaid.gov. You can check your Federal Student Aid account for status updates. If you think you should have received a decision or relief and haven’t, email sweet@ed.gov and copy info@ppsl.org, giving your full name, application number, and a description of the issue.³

The FTC has warned that no one can guarantee special access, move you up in line, or expedite relief. Anyone charging for that is running a scam.³

AFT v. Department of Education

The American Federation of Teachers filed this class action (No. 1:25-cv-00802) in March 2025, challenging the shutdown of the income-driven repayment application system and the Department’s failure to process cancellation for borrowers who had already met repayment milestones under IDR plans and Public Service Loan Forgiveness. Court filings documented a backlog of more than one million unprocessed IDR applications and over 74,000 unprocessed PSLF Buyback applications.⁶

A settlement was reached on October 17, 2025, requiring the Department to reopen the path to forgiveness for affected borrowers without triggering surprise tax bills.⁷ If you were stuck in IDR processing or waiting on PSLF credit, this case is the reason relief is moving again.

Maldonado v. MOHELA

Filed in September 2024, this class action alleges that servicer MOHELA failed to implement discharges the Department of Education had already ordered for former students of six for-profit school chains, including Corinthian Colleges, ITT Tech, and the Art Institutes. Plaintiffs say MOHELA kept reporting discharged loans as active debts and demanding payments. In April 2025, the court denied MOHELA’s motion to dismiss, and the case is proceeding.⁸ If your loans were supposed to be discharged and MOHELA is still trying to collect, this is the case tracking that problem.

The Navient Multistate Settlement

In January 2022, a bipartisan coalition of 39 state attorneys general announced a $1.85 billion settlement with servicer Navient. Allegations included steering borrowers into costly long-term forbearances instead of income-driven repayment and originating predatory subprime private loans to students at for-profit schools.⁹

The deal included $1.7 billion in private loan cancellation and $95 million in restitution for about 350,000 federal loan borrowers, who received roughly $260 each in July 2022.⁹ Payments have already gone out; there is nothing new to claim.

A Note on the SAVE Plan

The SAVE (Saving on a Valuable Education) repayment plan is often grouped with these cases, but it isn’t a class action delivering relief. It was a Biden-era repayment plan that Republican state attorneys general successfully challenged. The Eighth Circuit directed the lower court to enter final judgment ending it on March 10, 2026, following a settlement with the State of Missouri.¹⁰

No loan forgiveness will be granted under SAVE or REPAYE. Forgiveness under PSLF, ICR, PAYE, and IBR remains intact.¹¹ If you were enrolled in SAVE, you’re being transitioned to another plan rather than receiving a settlement payout.

1
Project on Predatory Student Lending. Sweet v. McMahon
2
Federal Student Aid. Sweet v. McMahon Settlement Information
3
Project on Predatory Student Lending. Sweet v. McMahon Class Members
4
Forbes. Student Loan Discharge Emails Sent to 30,000 Borrowers as Settlement Relief Proceeds
5
U.S. Court of Appeals for the Ninth Circuit. Sweet v. McMahon, No. 26-1136
6
Student Borrower Protection Center. AFT v. ED Update: AFT Adds Class Action Plaintiffs
7
Center for Responsible Lending. AFT Settlement Grants Loan Forgiveness for Millions of Student Borrowers
8
Project on Predatory Student Lending. Court Denies MOHELA’s Attempt to Dismiss Borrowers’ Lawsuit
9
Navient AG Settlement. Navient AG Settlement
10
The Institute for College Access & Success. Dept of Ed Announces End of SAVE Plan, Offers Little Clarity for Borrowers
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Free Student Loan Advice. SAVE Litigation Updates and FAQ