Supreme Court rules to move forward with $6 billion in student loan forgiveness for 200,000 borrowers

Cancel student debt "A sign read outside the United States Supreme Court in Washington, DC.

A “Cancel Student Debt” sign is displayed outside the United States Supreme Court in Washington, DC.Sarah Silbinger for The Washington Post via Getty Images

  • The Supreme Court has ruled that $6 billion in student debt relief for 200,000 borrowers can go forward.

  • The relief is part of a 2019 settlement from a lawsuit filed by borrowers who claimed they were defrauded.

  • The three schools named in the settlement asked the Supreme Court to put the relief on hold.

Supreme Court grants victory to thousands of student-loan borrowers.

On Thursday, the nation’s highest court ruled that 200,000 borrowers should receive $6 billion in student loan relief — due to a lawsuit. Years of charges It is now known as Sweet with Cardona The case was first filed in Under former President Donald Trump in 2019, you can file a borrower defense claim on behalf of borrowers or borrowers who believe they were defrauded by the school they attended. If they are allowed, their debt will disappear.

President Joe Biden’s Department of Education He agreed to make a deal Last summer, and a federal judge signed the relief in November. However, three schools named in the agreement soon appealed the decision, asking a lower court to halt the relief pending legal proceedings. The Ninth Circuit Court of Appeals rejected the request, and now, the Supreme Court has reached the same conclusion.

“The application for a stay by Justice Kagan and the Court is denied,” the Supreme Court wrote. A very short decision. He gave no explanation for the decision.

The three schools argued in their legal filings that they were not given “due process” to respond to the settlement claims; They said that the name of the settlement was damaged. But the Department of Education has pushed back on those claims. Writing in response “The department has already notified class members that they will receive waivers, directed credit servicers to initiate those waivers, updated its internal systems to overturn previous denials, and begin the trial process for reopened cases with a streamlined settlement process,” he filed in the Supreme Court on Wednesday.

“If the settlement continues, the resulting confusion will create confusion among borrowers, lenders and the public and will impair the Department’s ability to effectively implement its borrower-protection program,” he said.

This decision is separate from Biden’s broader plan to write off up to $20,000 in student debt for federal borrowers. The plan was stalled in November by two conservative-backed lawsuits seeking to block the relief permanently, and the Supreme Court heard oral arguments in the cases in February. A final decision on the legality of the sweeping debt relief plan is expected in June.

Read the original article on Business Insider

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