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Student loan settlement, forgiveness overview:
- Who: The Supreme Court will not block the settlement of a class action lawsuit benefiting student loan borrowers who say they were defrauded.
- Why: The court declined to uphold a petition from some of the colleges named in the settlement.
- Where: The student loan settlement applies to attendees of certain U.S. colleges.
The Supreme Court will not block the settlement of a class action lawsuit that will deliver $6 billion in student loan forgiveness to individuals across the country.
On April 13, the country’s highest court declined to block the settlement of a class-action lawsuit brought by student loan borrowers who say they’ve been defrauded by their schools, CNBC reported.
More than 150 schools, mostly for-profit institutions, were involved in the settlement. The claims go back to about 2015, when 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. After the action dragged on, borrowers ended up filing a class action lawsuit against the department in 2019 to force faster relief.
By 2022, borrowers and the government had reached a settlement.
Schools petitioned Supreme Court
However, three of the universities — Lincoln Educational Services Corp., American National University and Everglades College Inc. — petitioned the Supreme Court to block the settlement, arguing they were denied due process and that it harms their reputation.
The justices’ latest decision means the government can continue delivering on the $6 billion loan forgiveness 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,” Project on Predatory Student Lending President and Director Eileen Connor told CNBC.
If a borrower attended one of the colleges in the settlement and applied for a borrower defense loan discharge on or before June 22, 2022, they should be entitled to automatic relief.
Even if their application was previously denied, they should now qualify, CNBC reported. Borrowers eligible for automatic relief will likely get the cancellation no later than Jan. 28, 2024, and some may even see some cash as part of the agreement.
Are you impacted by this student loan forgiveness settlement? Let us know in the comments!
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30 thoughts onSupreme Court declines to block student loan settlement in fraud suit
How do i get involved with this? I attended CTU and was most definitely defrauded!
So how does this work if your loan was already paid off or consolidated? My son went to ITT Tech in 2005-2008. I can’t seem to find any answers on this. Thanks!
I was mislead by Colorado Technical University, Gadsden Business College, Everest College and several others