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Borrower Defense to Repayment: Litigation and Regulatory Update

Powers Law

Sam Whittaker, Sherry Gray, and Nick Michiels
April 3, 2026
In recent weeks, key developments in the borrower defense to repayment (“BDR”) process have raised important questions in the higher education community. First, continuing litigation in Sweet v. McMahon (formerly Sweet v. Cardona and Sweet v. DeVos) has created uncertainty regarding the outcome of over 170,000 “post-class applicant” claims filed between June 23 and November 15, 2022. Many institutions responded to these claims between summer 2023 and fall 2025. Second, the U.S. Department of Education (the “Department”) resumed sending notices of BDR claims to institutions in March 2026. These claims were filed by borrowers on or after November 16, 2022 and therefore are not subject to the Sweet settlement agreement nor directly affected by the outcome of that litigation. Below we describe the developments in Sweet and offer observations regarding new claims received in March 2026 and beyond.
Sweet Litigation
Under the terms of the Sweet settlement agreement, the Department agreed to issue final decisions by January 28, 2026 respecting the merits of BDR claims filed between June 23 and November 15, 2022. If the Department failed to decide these post-class applicant claims by January 28, 2026, then the borrower would be entitled to “full settlement relief” including discharge of loans associated with attendance at the school, a refund of amounts previously paid on the loan, and credit repair. In November 2025, as it became clear the Department would not meet the decision deadline as to most claims, the agency filed a motion seeking relief from the judgment—specifically, the Department asked the district court to grant an 18-month delay to allow adequate time to issue a decision on the merits of post-class applications.

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Bryan University

Primary Contact:

Eric Evans – President

Email: eric.evans@bryanuniversity.edu

Phone: (239) 292-6325

350 West Washington Street
Mailbox 320
Tempe, Arizona 85281

Website: Bryan University Online© Founded in 1940

Bryan University is institutionally accredited by the Northwest Commission on Colleges and Universities (NWCCU). The private, 85-year-old institution’s mission is to liberate the innate greatness in people by providing all students, regardless of their background, a pathway to achieve their dreams. In doing so, Bryan graduates are prepared with the knowledge and practical, productive skills that lead directly to professional careers. They are preferred by employers because they are dedicated, intelligent, immediately productive in the workplace, and pursue a lifetime of learning. We provide an inclusive educational experience to our students, driven by a core belief that all students can succeed, regardless of their different life experiences, cultural backgrounds, economic conditions, attitudes and beliefs, or personal characteristics. This experience includes a disciplined focus on providing excellent learner support and continuously improving learner outcomes.

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(ANN-26-04) 2026–2027 Federal Student Aid Handbook – Application and Verification Guide Now Available

Federal Student Aid 

April 2, 2026
Summary: This letter announces the availability of the Application and Verification Guide of the 2026–2027 Federal Student Aid Handbook.
Dear Colleague:
We are pleased to announce the availability of the 2026–2027 Application and Verification Guide, the initial volume of the 2026–2027 Federal Student Aid Handbook.
The Application and Verification Guide is intended for financial aid administrators and counselors who assist applicants with the beginning of the financial aid process—submitting the Free Application for Federal Student Aid (FAFSA®) form, verifying information, and making corrections and other updates to the information the applicant reported on the FAFSA form.
In addition to the Application and Verification Guide, the Federal Student Aid Handbook consists of nine numbered volumes and appendices. We publish the Federal Student Aid Handbook digitally on the Knowledge Center. Each time we publish a volume, appendix, or errata, we will inform the community through a Training Announcement (Dear Colleague Letter type “ANN”) on the Knowledge Center.

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A Guide for States on Implementing Workforce Pell Grants

edtrust

Sabreyna Reese, Roxanne Garza, Kyla Hurns, Tihirah Ruffin
April 2, 2026
A new guide explains how Workforce Pell expands federal financial aid to short-term, career-focused programs and how states and stakeholders can implement it effectively.
In July 2025, Congress expanded federal Pell Grant eligibility to cover learners and workers enrolled in short-term, career-focused postsecondary programs through a provision commonly known as Workforce Pell. This policy allows students and workers to use federal Pell Grants to pay for short-term training programs that lead to high-skill, high-wage, or in-demand jobs, creating faster and more flexible pathways into the workforce.
Before this change, many learners, including working adults and career changers, had to pay out of pocket for these programs, even as enrollment in shorter, workforce-focused credential programs continued to grow. With Workforce Pell, states now play a central role in determining which programs qualify, making state-level implementation and oversight crucial. Governors must work with state workforce boards, higher education agencies, programs, and employers to build the necessary approval processes and data systems.

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