The dispute stems from a class action filed by federal student loan borrowers seeking loan forgiveness under the "borrower defense" process for students defrauded by their schools. The borrowers sued the Education Department in 2019, alleging the agency failed to adjudicate their applications for relief under the Higher Education Act.
The Ninth Circuit found the department couldn't demonstrate it would likely succeed on appeal of two district court rulings denying deadline extensions. "The DOE can point to no changed circumstances that render it inequitable to apply the same settlement agreement that it bargained for years ago," the per curiam panel wrote. The court noted the department knew as early as February 2023 that over 205,000 post-class applicants were involved.
The case began in 2019 and resulted in a settlement agreement in June 2022 requiring the department to adjudicate post-class applications by January 28, 2026. When the department sought an 18-month extension in November 2025, a district judge called the proposed delay "just totally unacceptable," granting only partial relief before a second judge denied a renewed motion.
The denial sets up an expedited appeal on the merits as thousands of borrower defense applications await processing. The ruling affects post-class applicants who filed borrower defense claims between the June 2022 settlement and its November 2022 approval, with those missing the deadline entitled to "Full Settlement Relief" under the agreement.