"The Sweet settlement imposed an unrealistic deadline," said Ellen Keast, an Education Department spokesperson. Keast defended the department's actions during the litigation process.
"The Department has complied in good faith with court orders, and we believe the court erred in not granting our reasonable request," Keast said.
Affected borrowers shared the long-term impact of carrying fraudulent debts while awaiting regulatory decisions.
"They really marketed heavily in the area. It was on every radio station, every newspaper.
It was everywhere," said Jessica Feindt, a post-class applicant from Michigan who took out federal loans to attend the University of Phoenix.
Feindt described her reaction after logging in to find her balance erased following the court decision.
"I feel like I should be happy, but I'm really angry about all the years that my family suffered under these loans," Feindt said.
Financial experts noted that government delays compounded the problem by allowing interest to accumulate over multiple political terms.
"The federal government has no one else to blame but themselves for ballooning balances due to accruing interest over this time as three administrations, under both parties, failed to complete their duty under the federal student loan program," said Drew Powers, founder of Powers Financial Group.
Other industry observers emphasized that while the court decision resolves the debt balances, long-term credit damages remain for victims of predatory lending.
"This is welcome news for those who were victims of predatory lending and false promises made by now defunct and insolvent colleges and institutions across the country," said Kevin Thompson, CEO of 9i Capital Group.
