Daniel De La Hoz | Istock | Getty Images
The Supreme Court last week declined to block the settlement of a class-action lawsuit brought by student loan borrowers who say they’ve been defrauded by their schools. Now, the U.S. Department of Education will be able to continue delivering on the $6 billion loan forgiveness settlement.
More than 150 schools, mostly for-profit institutions, were involved in the settlement.
Three of those institutions — Lincoln Educational Services Corp., American National University and Everglades College Inc. — had petitioned the highest court. They’ve argued that they were denied due process with the settlement and that it harms their reputation.
More from Personal Finance:
Here’s the inflation breakdown for March 2023 — in one chart
This strategy could shave thousands off the cost of college
Why travel to Europe is no longer as much of a bargain
Consumer advocates applauded the justices’ decision.
“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,” said Eileen Connor, president and director of the Project on Predatory Student Lending.
Career Education Colleges and Universities, a trade association representing for-profit colleges, did not immediately respond to a request for comment.
Here’s what borrowers need to know about the settlement.
Relief is a result of class-action lawsuit by borrowers
Starting around 2015, the U.S. Department of Education was flooded with requests for loan forgiveness from students who said their school had misled them. The government has the authority to cancel federal student loan debt when a borrower’s school is found to have engaged in misconduct.
A large backlog of applications led a group of borrowers to file a class-action lawsuit against the department in 2019, demanding speedier relief.
The litigation played out over years, with the Trump administration at one point issuing notices denying the requested relief…
Read the full article here