The Education Department has begun discharging the student loans of hundreds of thousands of borrowers who say they were defrauded by their colleges after a federal judge recently ruled that a $6 billion settlement could largely move forward.
The settlement resolves a class-action lawsuit filed in 2018 by people who accused the department of ignoring their applications for loan forgiveness through a federal program known as borrower defense to repayment.
It was first approved in November by U.S. District Judge William Alsup of the Northern District of California. But a group of institutions — Everglades College, American National University and Lincoln Educational Services, the parent company of Lincoln Technical Institutes — appealed the judgment, claiming it violated the law.