Sweet v. Cardona Settlement: Borrower Defense Relief Guide
Deep analysis of the Sweet v. Cardona class action settlement, the list of 150+ identified predatory schools, full loan cancellations, and credit trade line deletion.
Overview of the Sweet v. Cardona Landmark Agreement
Originally filed in 2019 as Sweet v. DeVos in the U.S. District Court for the Northern of California, the Sweet v. Cardona class action lawsuit challenged the Department of Education's unlawful stagnation and blanket denials of Borrower Defense to Repayment applications.
The approved settlement delivered over $6 billion in debt cancellation to roughly 200,000 class members, alongside complete refunds of all previous payments made to the federal government on those loans and total deletion of related credit tradelines.
The Three Settlement Categories
- Automatic Relief Group: Borrowers who submitted Borrower Defense applications prior to June 22, 2022, regarding one of the 150+ approved for-profit institutions (such as Corinthian Colleges, ITT Tech, DeVry, University of Phoenix, Art Institutes). Receives 100% discharge and refunds.
- Decision Group: Class members who attended unlisted schools; Department of Education must issue detailed merit determinations within strict deadlines.
- Post-Class Applicants: Applications filed between June 22, 2022, and November 15, 2022; eligible for full relief if FSA fails to issue a decision within 36 months.
Review additional discharge options in our guide to Borrower Defense Regulations.
Frequently Asked Questions
Are refunds under Sweet v. Cardona taxable as income?
No. Under IRS Revenue Ruling 2020-11, loan discharges and refunds resulting from school misconduct and borrower defense are excluded from gross income.
Related Debt Relief Guides
Debt Relief Calculators
Model statutory discharge formulas:
• PSLF 120-Payment Milestone Tracker • SAVE Plan Discretionary Relief