$23 Billion Student Loan Settlement Is Now the Largest Class-Action in U.S. History — Here's Who Gets Relief

The Biggest Class-Action Settlement in U.S. History Just Got Bigger

The Sweet v. McMahon case has crossed a threshold that no student loan lawsuit — and no class-action lawsuit of any kind — has reached before. A unanimous July 2026 ruling from the Ninth Circuit Court of Appeals rejected the Education Department's attempt to delay automatic loan discharges for more than 170,000 additional borrowers, pushing total relief under the settlement to $23 billion. To put that in context: this settlement now ranks alongside the National Mortgage Settlement of 2012 ($25 billion) and surpasses most other landmark consumer cases in American history. If you attended a predatory school and ever filed a Borrower Defense to Repayment application, this ruling directly affects your options.

What Sweet v. McMahon Actually Covers

The case grew out of a decade-long failure by the Education Department to process Borrower Defense claims — a federal program that lets you apply for a loan discharge if your school deceived you to get your enrollment. Think inflated salary projections, false claims about credit transferability, or misrepresented job placement rates. By June 2019, more than 200,000 claims had been sitting unresolved for up to four years, many of them stalled under Secretary Betsy DeVos. The 2022 settlement created two borrower groups: those already on the approved school list (called "Exhibit C") who qualified for automatic discharges, and a second group of "post-class applicants" — people who submitted Borrower Defense claims during a five-month window before November 2022 — who were entitled to a full merit review within three years or automatic full relief if that review didn't happen.

“"The landmark borrower defense case Sweet v. McMahon is now the largest-ever settlement against the U.S. federal government, and the largest class-action settlement in American history." *— Project on Predatory Student Lending (PPSL), July 2026*”

Why the Court Rejected the