Student Loan Forgiveness Plan Worth $6 Billion Can Move Forward, Says Supreme Court

People suffering from student loans might get a reprieve as a massive $6 billion student loan forgiveness plan will be moving forward, thanks to a Supreme Court ruling on Thursday.

The massive settlement that forgave $6 billion in federal loans for around 200,000 students at for-profit schools or vocational programs was one of the president's most popular policies. However, several schools asked the Supreme Court to block it.

According to the New York Times, the issue at hand was a class-action lawsuit filed in 2019 that sought to require the government to reduce the backlog. The Trump administration tried to block this, but a federal judge denied this attempt and said that the Trump administration's actions were "disturbingly Kafkaesque."

The class-action lawsuit to cancel student debt was initially filed during the Trump administration. However, as Joe Biden became president, he and his Department of Justice agreed to a settlement last summer, and a federal judge approved it last November. However, the move to hand out student loan forgiveness soon stalled.

Three Schools Tried to Block the Student Debt Forgiveness Settlement

Three schools soon challenged the historic settlement after a judge ruled in favor of it: Everglades College, Lincoln Educational Services Corporation, and the American National University. These schools claimed the settlement was a "product of collusion between the Biden administration and lawyers for the borrowers."

"Through a collusive, nationwide class settlement of a lawsuit that sought to compel the department merely to restart adjudication of applications for loan cancellation," argued the schools' lawyers to the justices. They added that the Department of Education "ignored its regulations, foregone adjudication altogether, and plans to cancel and refund billions in loans for hundreds of thousands of borrowers."

The schools stated that the settlement harmed them as it "hurt their reputations and subjected them to the possibility that the government would seek to recoup the forgiven loans from them."

However, the Supreme Court agreed with a previous ruling by the Ninth Circuit Court of Appeals, handing a massive legal and financial victory to thousands of student loan borrowers across the country.

According to Yahoo! News, the decision is still separate from Joe Biden's broader plan to cancel up to $20,000 in student debt for federal borrowers.

Like this one, the Biden plan was also stalled by conservative-backed lawsuits seeking to block the relief permanently. Oral arguments have already been heard by the Supreme Court last February, and a decision is expected by June.

Student Loan Pause Benefitted Richer Borrowers

Student loan payments were temporarily paused during the pandemic. However, as the pandemic is now officially over, people would now have to start paying them once again.

Brookings pointed out that this pause would be easier for some than others.

Those who have higher incomes and never suffered wage losses due to the pandemic would have already recovered from any short-term financial effects of the pandemic, which means that they can have an easier time paying those student loan debts.

However, those struggling with student loan payments before the pandemic will have a harder time paying as payments restart. This is all the harder as conservatives have stalled the student loan cancellation plan proposed by the Biden administration, which many have seen to be a massive relief for them financially.

READ MORE: Tennessee Three Member Justin Pearson Also Reinstated Unanimously

This article is owned by Latin Post.

Written by: Rick Martin

WATCH: Supreme Court won't block $6B student debt relief settlement - WGN News