Student Debt

Supreme Court Allows $6 Billion Student Loan Debt Settlement

The class-action settlement concerns loans that borrowers claim should be canceled because they were taken out based on misrepresentation made by their schools, many of which are for-profit. 

AP Photo/Mariam Zuhaib

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 Supreme Court in a brief order rejected a request made by colleges challenging the settlement.

The case is unrelated to President Joe Biden’s broader effort to forgive student loan debt, which is also before the justices, with a ruling due in the next two months.

The class-action settlement concerns loans that borrowers claim should be canceled because they were taken out based on misrepresentation made by their schools, many of which are for-profit. 

For-profit college ads promise “outstanding job placement” and “exciting careers,” but some who end up enrolling — often immigrants and low-income students — say they leave with little more than debt. Pei-Sze Cheng reports

For more on this story, go to NBC News.

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