Supreme Court Declines To Block $6B Student Loan Debt Settlement, As Justices Deliberate On Biden’s Policy
The Supreme Court on Thursday (April 13) declined to stop a $6 billion legal settlement that would cancel the student loan debts of about 200,000 students who accused their schools of fraud, The Hill reported.
This class-action suit stems from a complaint filed against the Department of Education in 2019.
It’s unrelated to President Joe Biden’s program to cancel student loan debt for approximately 40 million people, but the high court’s decision Thursday was a defeat for conservatives.
The plaintiffs alleged that the schools, mostly nonprofits, misled them about the quality of their education and job prospects after graduating to boost enrollment.
It revolves around a federal rule, known as borrower defense, through which federal student loan borrowers can request the Education Department to forgive student debt if a school misled them, according to NPR.
A federal district judge approved the settlement in November. But three schools – Everglades College, American National University and Lincoln Educational Services – appealed the decision. The appellants then asked the Supreme Court to intervene after the federal appeals court denied their attempt to stop the settlement, Inside Higher Ed reported.
Although the class-action suit was not directly related to Biden’s debt relief policy, 20 Republican attorneys general came together to ask the Supreme Court to intervene, accusing the Education Department of promoting Biden’s policy, according to The Washington Post.
“For years, the [Education] Secretary defended against these class-action claims. But once the President decided to forgive student debt by executive fiat, the Secretary had a change of heart,” the attorneys general wrote, according to The Post. “By strategically surrendering the case, the Secretary seized immense power that Congress had never given him. This ill-gotten power enabled the Secretary to pursue the mass forgiveness of student loans.”
A decision in the lawsuit to block Biden’s federal student loan debt relief program is expected within the next few months.
