The U.S. Supreme Court on Thursday refused to halt a legal settlement that would erase more than $6 billion in debt owed by former students of colleges - many of them for-profit institutions - who have said they were misled by schools about academics and job prospects.
The justices turned away a request from three colleges that are challenging a settlement between the U.S. Education Department and borrowers that linked the colleges to claims of "substantial misconduct," an allegation they dispute.and American National University Inc as well as nonprofit Everglades College Inc - challenged the agreement after it was approved by a federal judge in California last November.
The schools have been accused of boosting enrollment through aggressive sales tactics as well as misrepresentations about the quality of their academic offerings, graduates' career prospects and networking opportunities, according to Eileen Connor, director of litigation at the Project on Predatory Student Lending, a group that represents borrowers involved in the settlement.
The settlement arose from what initially was a legal effort by borrowers in 2019 to force then-Education Secretary Betsy DeVos, who served under President Donald Trump, to resume the Education Department's adjudication of their misconduct claims against the schools. After three years of litigation and a change in presidential administrations, the parties reached a settlement in June 2022.
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