Durbin Applauds Court Ruling Approving $11 Billion In Borrower Defense Claims For Students Defrauded By For-Profit Colleges

Durbin Applauds Court Ruling Approving $11 Billion In Borrower Defense Claims For Students Defrauded By For-Profit Colleges

The class action lawsuit was originally filed during the first Trump Administration

WASHINGTON - In a speech on the Senate floor, U.S. Senate Democratic Whip Dick Durbin (D-IL) today applauded the U.S. Court of Appeals for the 9th Circuit's ruling that the U.S. Department of Education must approve $11 billion in borrower defense claims for more than 170,000 students who were defrauded by predatory for-profit colleges. Durbin has worked for years to hold these predatory schools and their executives accountable for exploiting students and fleecing taxpayers while fighting for debt relief for the students they've harmed.

"What you don't know is that although only eight percent of [American college students] go to for-profit colleges and universities, 30 percent of all student loan defaults are the students from these same schools. What's going on here? Such a low number, eight percent, going on to these schools, and such a high number of loan defaults. That's because they issue worthless degrees and entice these students into deep debt," Durbin said. "Many times, a parent, or even a grandparent, will cosign on the loans for these for-profit schools. And when everything falls apart, as it's likely to, everybody is held liable and responsible. That's why we've had an ongoing battle here in Washington for years against the for-profit college and university industry."

A class action lawsuit, Sweet v. McMahon, originated during the first Trump Administration, with hundreds of thousands of students asserting that the Trump Administration had intentionally and illegally stopped reviewing their borrower defense claims-which allow students who were defrauded by their institution to receive federal student loan discharges. In 2022, the Biden Administration settled the suit by promising to provide automatic relief for students who attended one of more than 150 schools, the vast majority of which were predatory for-profit colleges. However, the second Trump Administration has stalled in reviewing fraud claims for borrowers who applied after the 2022 settlement was reached.

Last month, the U.S. Court of Appeals for the 9th Circuit did not approve the Trump Administration's request for an extension to review the borrower defense claims. The Trump Administration must now provide relief for the borrower defense claims approved after the Biden Administration settled the suit in 2022. In total, this is the largest class action settlement in history, with nearly 500,000 borrowers seeing $23 billion in total federal student debt forgiven.

"There was a legal battle in a case called Sweet vs McMahon, which has gone on for years. It finally, last week, came to an end. And it's an important case on this subject of for-profit colleges and universities. It was the largest class action settlement against the federal government in the history of our nation," Durbin said. "That's life changing news for nearly half a million federal student loan borrowers, who will receive $23 billion in relief after being misled and defrauded by for-profit colleges."

Durbin continued, "While the Trump Administration can quickly greenlight permanent tax breaks for the wealthiest Americans, as in their so-called 'Big, Beautiful Bill', they hesitated when it came to giving relief to these students who just wanted a fair shot… Like their tactics with DACA recipients and the slow walking of renewal applications with the USCIS, the Administration was asking for more time so that they could bleed out these borrowers and deny relief to hundreds of thousands of students deep in debt, living in their parents' basement, trying to figure out if they had a future. This is where their [Trump Administration] priorities lie. I'm glad these borrowers, after years and years of waiting, will finally get the relief they're entitled to."

Durbin then recounted the letter he sends every year to Illinois high school principals, counselors, and teachers asking them to warn college-bound students and their families about the risks associated with attending for-profit colleges.

"For the last 15 years or more, I've sent a letter to every high school counselor in the state of Illinois. I… warned them, be careful not to let your students be lured into these for-profit colleges and universities," Durbin said. "They may be a total waste or worse. It could be a debt that trails you for years and years, if not decades, in your life. Thank goodness for these students, these thousands of students who were benefited by President Biden's decision. The Courts finally stood by them and gave these students a second chance."

Durbin concluded, "It's been a situation I've run into time and again. I have threatened some of these for-profit schools as a way of getting them to drop the loans that they were enforcing on these students, because I know what happens in the end. Students need to be careful. You can't go wrong starting with City Colleges and community colleges in your community… I beg my young students in Illinois to start there, and counselors to do their job and discourage kids from getting involved with these for-profit schools."

Video of Durbin's floor speech is available here.

Audio of Durbin's floor speech is available here.

Footage of Durbin's floor speech is available here for TV Stations.

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