US Supreme Court will not block $6 billion student debt relief settlement

Washington: On Thursday, the US Supreme Court declined to block a court settlement that would erase more than $6 billion in debt due by former students of universities, many of which are for-profit institutions, who claim that their academic and employment prospects were misrepresented by their institutions. The justices turned away a request from three colleges that are challenging a settlement between the US Education Department and borrowers that linked the colleges to claims of “substantial misconduct,” an allegation they dispute. After the settlement was granted by a federal judge in California in November, three of the schools named in it—for-profit American National University Inc., nonprofit Everglades College Inc., and for-profit Lincoln Educational Services Corp.—challenged it. One of the three schools was attended by about 3,500 debtors who qualified for an immediate loan discharge under the settlement. The ruling had nothing to do with the constitutionality of President Joe Biden’s proposal to forgive $430 billion in student debt for nearly 40 million students, which is a matter currently before the Supreme Court. By the end of June, a decision on that matter is anticipated. The latest dispute stemmed from a class-action settlement under which the Education Department would automatically cancel the debt of nearly 200,000 borrowers who attended 151 schools. The schools have been accused of boosting enrollment through aggressive sales tactics as well as misrepresentations about the quality of their academic offerings, graduates’ career prospects and networking opportunities, according to Eileen Connor, director of litigation at the Project on Predatory Student Lending, a group that represents borrowers involved in the settlement. “Today’s swift and decisive action from the highest court should end, once and for all, any ongoing debate about the legitimacy of this settlement. The message is clear: the rights of student borrowers will not falter, even in the face of well-funded, overblown political attacks masquerading as legal argument,” Connor told Reuters. The three schools argued in court filings they had suffered reputational harm, comparing their inclusion on the settlement’s list of schools to being “branded with [a] scarlet letter.” They also argued the Biden administration lacked the legal authority to cancel the debt. The settlement arose from what initially was a legal effort by borrowers in 2019 to force then-Education Secretary Betsy DeVos, who served under President Donald Trump, to resume the Education Department’s adjudication of their misconduct claims against the schools. After three years of litigation and a change in presidential administrations, the parties reached a settlement in June 2022. California-based US District Judge William Alsup approved the settlement last year and in February rejected the objections raised by the three colleges. The San Francisco-based 9th US Circuit Court of Appeals in March denied the bid by the three schools to block the settlement from taking effect while their appeal proceeds. Twenty conservative-leaning US states, led by Ohio, had asked the Supreme Court to grant the request by the schools to pause further loan discharges under the settlement. Around 78,000 borrowers had already received loan discharges by 11 April, the Biden administration told the justices in a court filing. The administration declined to comment and an attorney for the schools did not immediately respond to a request for comment. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.