Supreme Court rejects borrower-defense appeal

The U.S. Supreme Court declined to block a class-action settlement in a long-running lawsuit against the U.S. Department of Education regarding stalled borrower defense to repayment claims.

Lincoln Educational Services Corporation, Everglades College Inc. and American National University—the three colleges that intervened in the lawsuit—sought to stop the settlement from happening while their appeal moves forward, arguing that Education Secretary Miguel Cardona didn’t have the authority to make the agreement, which would’ve forgiven $6 billion in student loans for thousands of borrowers. They also argued that the settlement violates the due process rights of the colleges and that the intervenors will suffer irreparable harm without a stay.

A group of Republican attorneys general sided with the plaintiffs in an amicus brief.

The Biden administration and the plaintiffs in the lawsuit urged the court to reject the emergency application in briefs filed Wednesday.

“Applicants have not shown any basis for a stay from this court,” the administration wrote. “The settlement does not subject them to any liability, adjudicate their rights, or require them to do or refrain from doing anything.”

No dissents were noted in the brief, unsigned order denying the stay application.