US Supreme Court Allows $6 Billion in Student Loan Debt Cancellation Settlement to Proceed

The Supreme Court is allowing a roughly $6 billion legal settlement to go forward that will cancel student loans for hundreds of thousands of borrowers who say they were misled. This follows a complex legal battle and brings relief to many.

In what was a seminal decision, the US Supreme Court is set to allow $6 billion in student loan debt to be canceled, resolving a long-standing dispute. Specifically, the highest Federal Judiciary of the US declined to block the settlement.

WASHINGTON—A settlement that will allow thousands of student loan debts to be canceled will go into effect after the Supreme Court on Thursday declined to block it. The US Supreme Court refused to block a legal settlement that would cancel $6 billion in debt for students who say they were misled about job prospects by a group of institutions.

This news comes amidst ongoing debate about broader student loan forgiveness initiatives. It's important to note that the US Supreme Court has also struck down US President Joe Biden's proposal to wipe out billions in student debt. The 6-3 ruling effectively cancels the plan, which would have provided wider relief to borrowers.

Students borrowers and activists react bitterly to a sharply divided Supreme Court ruling that has effectively killed President Joe Biden’s $400 billion plan to cancel or significantly reduce student loan debt for millions. However, this $6 billion settlement represents a separate legal action focused on specific instances of alleged fraud and misrepresentation.