The Supreme Court has ruled that $6 billion in student debt relief for 200,000 borrowers can move forward, marking a victory for those who claimed they were defrauded by their schools. The relief is part of a settlement resulting from a lawsuit filed in 2019 under former President Donald Trump, now known as Sweet vs. Cardona. Borrowers with stalled borrower defense claims filed the suit, seeking to have their debt wiped out if approved. President Joe Biden's Education Department agreed to a settlement last summer, which was signed off by a federal judge in November. However, three schools named in the settlement appealed the decision, citing reputational harm and lack of due process. The Ninth Circuit Court of Appeals rejected the request, and now, the Supreme Court has done the same. The schools argued they were not given "due process" to respond to the claims in the settlement. However, the Education Department pushed back on those claims, stating that the relief had already been implemented by notifying class members they would receive discharges and directing loan servicers to start processing those discharges. The decision is separate from Biden's plan to cancel up to $20,000 in student debt for federal borrowers, which was paused in November due to two conservative-backed lawsuits seeking to block the relief. The Supreme Court heard oral arguments for the cases in February and is expected to issue a final decision by June.
Supreme Court approves $6 billion in student-loan forgiveness