Sweet v. Cardona
Information for Class Members
To learn if you are a member of the class, and to find out more information for class members, click the link below.
Despite the change in administration, the Department of Education continues to delay decisions on borrower defense claims, and has so far refused to formally rescind many of the policies put in place by the DeVos administration. The court has scheduled a trial in this case for July 2022.
Who Is Involved In This Case?
Named Plaintiffs brought this lawsuit in June 2019 on behalf of themselves and all other former students whose claims for loan cancellation (“Borrower Defense applications”) were ignored by the Department of Education. Immediately after filing the lawsuit, the students asked the court to let them represent all students in the same situation, with a motion for class certification. The motion included more than 900 affidavits from students describing the harm that the Department’s inaction had caused – with 96% saying their lives were worse than before they attended school. In October 2019, the court certified the class of over 200,000 borrowers with pending claims.
Starting in December 2019, the Department began issuing form denial notices to tens of thousands of borrowers who had applied for loan cancellation. These notices did not contain any real information about why the applications had been denied. In March 2021, Plaintiffs supplemented their complaint to add a claim on behalf of all borrowers who had received form denial notices.
What Is This Case About?
Over the past several decades, millions of students borrowed federal student loans to attend various for-profit colleges, including ITT Technical Institute, Corinthian Colleges, the Art Institutes, Salter College, Brooks Institute of Photography, and more. The schools falsely promised students high-paying jobs, state-of-the-art vocational training, and long and fulfilling careers.
Between 2015 and 2019, over 200,000 of these former students asserted their right under federal law to discharge their federal student loans due to their schools’ misconduct. As it was legally obligated to do, the Department of Education started to adjudicate these borrower defenses, approving nearly 28,000 borrower defenses in the six-month period before January 20, 2017.
Then, under Secretary DeVos, the Department of Education halted all processing of borrower defense claims, refused to adjudicate any borrower defense from any student for well over a year, and ordered the office of Federal Student Aid to stop processing borrower defense applications. As of 2019, more than 200,000 students had a borrower defense pending. Many of them had been unresolved for over four years.
The Department of Education’s decision to keep these students in limbo further destroyed students’ credit and limited their access to federal student aid. For students who defaulted on their loans, the Department of Education invoked its extraordinary powers to garnish their wages or seize their tax refunds (for many, their Earned Income Tax Credit).
With this lawsuit, the plaintiffs demanded that the Department do its job and start adjudicating their borrower defenses immediately.
After a proposed settlement agreement was filed in spring of 2020, the Department of Education sent out tens of thousands of blanket denials of borrower defense claims. Many of these form letters denied relief due to a “lack of evidence,” despite the extensive evidence submitted, even in cases where other government enforcement agencies had found fraud. After a historic hearing held on Zoom and attended by over 500 student borrowers in fall of 2020, the judge found the Department of Education was not acting in good faith by sending out blanket denials and rejected the proposed settlement.
The judge also ordered discovery, allowing lawyers for the student borrowers in this case to obtain documents and to depose officials at the Department of Education. A review of these documents and depositions revealed alarming evidence that the U.S. Department of Education created a sham process designed to deny borrowers debt relief regardless of evidence. In March 2021, student borrowers filed a supplemental complaint citing this new evidence.
Where and When Was This Case Filed?
This case was filed in the United States District Court for the Northern District of California in the San Francisco Bay Area on Tuesday, June 25, 2019.
Why this case?
The law is clear: students who experienced fraud should not be required to pay back federal loans that should never have been made by the Department in the first place. Since Betsy DeVos repeatedly ignored these students’ legal rights, the only way they could have their voices heard was through the courts. The students in this case continue to press the current administration to recognize their established rights.
This lawsuit builds on past legal efforts to hold the Department of Education accountable and stand up for students through court action, which has become one of the only ways for defrauded students to assert their rights. In the case of Williams v. King, students fought back against having their tax refunds stolen by the Department of Education, and won. In the case of Calvillo Manriquez v. DeVos, students preliminarily stopped the Department from limiting the relief it provided to students who it had already decided were entitled to full relief. And in Bauer v. DeVos, a judge forced the Department of Education to implement the 2016 Borrower Defense rule. In August 2019, Secretary DeVos issued a new borrower defense rule imposing near-impossible standards for student borrowers. in February 2020, the Project challenged the new rule in court.
"I believe the work that is being done by the Project on Predatory Student Lending has helped bring light to a very dark corner of our education system. On a more personal level, the Project has given me the courage to speak about this issue. There can be a lot of fear and shame associated with being victims of education fraud. But the Project’s work has helped show me, and millions of other students who were cheated, that there is nothing to be ashamed of and that if we speak up and stand together we can make a difference."
- Theresa Sweet, the lead plaintiff in Sweet v. Cardona
To read statements in support of our case, click below.
To read testimony submitted by defrauded former for-profit college students, click below.
The Biden Administration’s DOJ Continues to Shield DeVos in Borrower Defense Proceeding | Press Release
Student borrowers in the lawsuit Sweet v. Cardona (formerly Sweet v. DeVos) on Monday filed a response to a court request asking whether the issue of deposing former Education Secretary Betsy DeVos should be reheard “en banc” in the Ninth Circuit Court of Appeals. If granted, a panel of judges in the Ninth Circuit would reconsider whether Plaintiffs will be allowed to depose former Secretary DeVos about her knowledge surrounding the Department of Education’s long-delayed borrower defense process.
Student borrowers are keeping the pressure up in 2022 | Blog
In just three months of 2022, we’ve seen notable progress in the fight towards holding predatory for-profit colleges and those who enable them accountable. From a scathing report detailing ITT’s decades of wrongdoing, to students in Sweet v. Cardona calling out the growing borrower defense backlog, borrowers are not letting up and keeping the pressure on the Education Department’s arbitrarily long and winding road to justice.
Student Borrowers File New Brief in Lawsuit Regarding Borrower Defense Delays and Backlog | Press Release
Today, student borrowers submitted a new filing in the lawsuit Sweet v. Cardona regarding the U.S. Education Department’s ongoing delays in processing borrower defense claims. The filing follows Judge William Alsup’s request for a status update as to what is taking so long to resolve the claims. Several borrowers have written directly to Judge Alsup in recent months seeking answers.
Plaintiffs' filed an Amended Complaint citing new evidence that the U.S. Department of Education not only illegally delayed processing borrower defense claims, but created a sham process designed to deny borrowers debt relief regardless of evidence.
The Court denied the settlement and ordered discovery on the Department of Education’s explanations of its process for deciding claims, and will consider enjoining the use of the form denial notices.
US News and World Report
Feds Forgive Loans of Thousands More Defrauded Student Borrowers | US News and World Report
Nearly 16,000 federal student loan borrowers will receive $415 million in relief, according to an announcement Wednesday by the Education Department that provided new details of fraud by several for-profit schools, including those who attended DeVry University.
New York Times
The Education Department will wipe out loans for students defrauded by DeVry University | The New York Times
The Education Department will cancel federal student loans for at least 1,800 students who attended DeVry University, once one of the nation’s largest for-profit college chains, because it fraudulently lured in applicants for years with vastly inflated claims about their career prospects.
DeVry University misled students. Now, the federal government is erasing their debt | NPR
Nearly 16,000 federal student loan borrowers who were misled by for-profit colleges will have $415 million in debts erased, according to the U.S. Department of Education. These borrowers — who attended DeVry University, ITT Technical Institute and other schools — will receive relief through a legal provision known as borrower defense, which promises loan relief for defrauded borrowers.