The U.S. Department of Education agreed to cancel $6 billion of student loans for nearly 200,000 borrowers who claimed they were defrauded by their colleges.
U.S. Secretary of Education Miguel Cardona issued a statement following the Sweet v. Cardona settlement that was filed with the U.S. District Court for the Northern District of California on Wednesday.
“Since day one, the Biden-Harris Administration has worked to address longstanding issues relating to the borrower defense process," Cardona said in the statement.
"We are pleased to have worked with plaintiffs to reach an agreement that will deliver billions of dollars of automatic relief to approximately 200,000 borrowers and that we believe will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties."
The agreed deal still will need to be approved by a federal judge, according to The New York Times. Those who qualify as eligible borrowers applied for relief and attended one of more than 150 colleges, including DeVry University, ITT Tech, The Art Institute, and University of Phoenix.
Previously, the Biden administration approved $25 billion in loan forgiveness for 1.3 million borrowers, according to Reuters.
There are 45.5 million Americans that have federal student loan debt, amassing a total of $1.59 trillion still owed, according to Education Data Initiative.
Eileen Connor, director of Harvard Law School's Project on Predatory Student Lending, which represented borrowers in the case, said that proposed settlement was historic.
"This momentous proposed settlement will deliver answers and certainty to borrowers who have fought long and hard for a fair resolution of their borrower defense claims after being cheated by their schools and ignored or even rejected by their government," Connor said.
Some borrowers have been waiting years for their claims to be processed by the Department of Education. In 2019, about 264,000 people claimed their applications were being ignored and brought a class-action lawsuit against the government, according to CNBC.
The other 64,000 borrowers will receive decisions on their applications depending on how long they have been waiting, according to CNN.
Former U.S. Secretary of Education Betsy Devos, under former President Donald Trump, froze the "borrower defense to repayment" program, causing the claims to pile up drastically. The Biden administration has brought back the program to begin cutting down the student loan debt, including clearing $5.8 billion for 560,000 borrowers that attended Corinthian Colleges, which shut down in 2015.
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