April 20, 2023
Supreme Court Greenlights Student Loan Forgiveness for Defrauded Borrowers. What's Next?
The Supreme Court last week declined to a block a $6 billion settlement between the U.S. Education Department and nearly 300,000 student loan borrowers who were defrauded or mislead by their colleges.
The latest development stems from a 2019 class-action lawsuit that is unrelated to the cases challenging President Joe Biden’s plan for mass debt relief. During oral arguments for those cases earlier this year, the court’s conservative justices signaled significant skepticism of the plan, which would forgive up to $20,000 in loans for low- and middle-income Americans. The Supreme Court’s recent decision, however, shows its openness to debt forgiveness for at least some students – and hints at another vehicle for doing so if Biden’s plan is shot down.
The latest development stems from a 2019 class-action lawsuit that is unrelated to the cases challenging President Joe Biden’s plan for mass debt relief. During oral arguments for those cases earlier this year, the court’s conservative justices signaled significant skepticism of the plan, which would forgive up to $20,000 in loans for low- and middle-income Americans. The Supreme Court’s recent decision, however, shows its openness to debt forgiveness for at least some students – and hints at another vehicle for doing so if Biden’s plan is shot down.