A student loan borrower advocacy group has sued the Education Department, demanding information and records on discharges of federal student loans. The department previously committed to automatically cancelling over $23 billion in student loans for 1.5 million borrowers who attended schools that the department alleged had engaged in misconduct. However, many approved borrowers report that their loan balances have not been cancelled. The legal group filed this lawsuit after the department allegedly ignored multiple Freedom of Information Act requests. The suit seeks to compel ED to release records on discharge processing so advocates can determine if the promised relief is actually reaching eligible borrowers. This action could pave the way for further legal challenges.

A student loan borrower legal group filed a new lawsuit last week against the Education Department, demanding information and records on the status of group discharges for federal student loans. The department, the lawsuit argues, promised to discharge more than $23 billion in student loans for 1.5 million borrowers, but it has released minimal information on the progress of these discharges. Meanwhile, borrowers have been reporting that while they received approval to have their student loans wiped out, their loan balances remain on the books.

“The Department made public promises to more than 1.5 million borrowers,” said Eileen Connor, President and Executive Director of the Project on Predatory Student Lending, the organization that filed the suit, in a statement last Tuesday. "It shouldn’t take a lawsuit to learn whether those promises have been fulfilled. Borrowers and the public have a right to know whether the Department has delivered the relief it announced."

Here are the details on the latest legal challenge the department is facing related to forgiving student loans, and what borrowers should know.

The lawsuit centers on a series of announcements made by the Education Department over a three-year period that borrowers who had attended certain schools during specific periods would have their student loans automatically discharged. The discharges were group discharge approvals under Borrower Defense to Repayment, a program that allows borrowers to request that their student loans be forgiven on the basis of school misconduct. Under the group discharge announcements, borrowers could qualify for student loan relief even if they never formally submitted a Borrower Defense application.

“Between April 2022 and January 2025, the Department of Education announced ten group discharges for borrowers who attended schools that it determined had engaged in widespread misconduct,” explained the Project on Predatory Student Lending in its statement last week. “In each announcement, the Department identified misconduct by the schools, stated that approved borrowers would automatically receive federal student loan discharges and any other applicable relief, and told borrowers they did not need to take any further action.”

The group discharges differ from the relief provided under the Sweet v. Cardona settlement. While the Sweet v. Cardona settlement also involved the Borrower Defense to Repayment program, that relief was related to the department’s failure to timely adjudicate tends of thousands of Borrower Defense applications. The group discharges, on the other hand, are blanket approvals for student loan relief for borrowers who attended certain schools during specific periods, regardless of whether or not they formally submitted a Borrower Defense application.

Many of these student loan relief announcements are still on the Education Department’s website for group discharges under Borrower Defense to Repayment. The announcements explain the basis for the group discharges and outlines who is eligible to have their student loans cancelled.

“The U.S. Department of Education (ED) announced that borrowers who enrolled in Ashford University (Ashford), now known as the University of Arizona Global Campus, between March 1, 2009, and April 30, 2020, will receive 100% discharges of their eligible federal student loans,” says one such group discharge announcement from January 15, 2025. “Approximately 261,000 borrowers will have approximately $4.5 billion in loans discharged automatically.”

“The U.S. Department of Education (ED) announced that borrowers who enrolled at any Center for Excellence in Higher Education (CEHE) school between Jan. 1, 2006, and Aug. 1, 2021, will receive 100% discharges of their eligible federal student loans,” says another announcement from January 13, 2025. “This covers borrowers who attended Independence University, CollegeAmerica, Stevens-Henager College, and California College San Diego. Approximately 73,600 borrowers will have $1.15 billion in loans discharged automatically.”