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Supreme Court leaves student loan settlement in place

A view of the U.S. Supreme Court building on May 9, 2022 in Washington, D.C.
Anna Moneymaker
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Getty Images
A view of the U.S. Supreme Court building on May 9, 2022 in Washington, D.C.

The Supreme Court on Thursday refused to block a settlement in a long-running suit involving the adjudication of applications for the cancellation of student loan debts at 151 for-profit colleges.

Three institutions — Everglades College Inc., Lincoln Educational Services Corp., and American National University Inc. — had asked the high court to step in and prevent the settlement from going forward because of what they said would be "reputational harm." They also maintained that the secretary of education did not have the authority to settle claims by providing "student loan cancellations and refunds."

But the Biden administration, noting that the case did not involve loans related to pandemic relief, contended that federal law gave the department ample authority to settle the case, and that any reputational harm to the institutions was "purely speculative."

The settlement, approved in federal court last November, canceled and refunded 200,000 federal student loans at 151 schools, and totaled more than estimated $6 billion.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

Nina Totenberg is NPR's award-winning legal affairs correspondent. Her reports air regularly on NPR's critically acclaimed newsmagazines All Things Considered, Morning Edition, and Weekend Edition.
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