Court won't block $6B student debt relief settlement

WASHINGTON (AP) — The Supreme Court last Thursday allowed 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 by their schools.

The justices did not comment in rejecting an emergency plea from Everglades College, Lincoln Educational Services Corp. and American National University. The schools had argued that they were unfairly included on a list of more than 150 institutions, most of them for-profit, linked with alleged misconduct. Lincoln and American are for-profit institutions; Everglades is a not-for-profit.

The justices' action comes as the high court is weighing what to do with the Biden administration's plan to wipe away $400 billion in student debt held by more than 40 million people. A decision on that plan is expected by late June.

The legal challenges have some similarities but the administration is relying on different laws in the two programs.

The class-action settlement was approved late last year by U.S. District Judge William Alsup in San Francisco in response to complaints that the 150-plus schools had made false recruiting claims and left many students unable to find jobs.

The Justice Department has already begun implementing the agreement and said in court that roughly 3,800 borrowers who are part of the settlement attended the three schools.

Lower courts had previously denied the schools' efforts to halt the settlement while they appeal.

Justices let challenges to federal agencies go forward

By Jessica Gresko
Associated Press

WASHINGTON (AP) — The Supreme Court is allowing challenges to the structure of two federal agencies to go forward in federal court.

The high court ruled unanimously last Friday to allow challenges to the structures of the Federal Trade Commission and the Securities and Exchange Commission to go forward in federal court. Lower courts had split on whether those challenges could proceed.

In one case, the FTC had brought an enforcement action against Axon Enterprise, the Arizona-based company best known for developing the Taser, arguing that its purchase of its competitor Vievu for approximately $13 million was improper. The other case involved an SEC enforcement action against Michelle Cochran, a certified public accountant. Axon and Cochran responded by suing in federal court and arguing that the structure of the FTC and SEC respectively are unconstitutional. Each said that the administrative law judges that oversee enforcement actions are insufficiently accountable to the president, in violation of separation-of-powers principles in the Constitution.

Both lawsuits were initially dismissed. Axon and Cochran appealed and while a federal appeals court in California said Axon's lawsuit could not go forward, a federal appeals court based in New Orleans said Cochran's case could move ahead.

Justice Elena Kagan wrote in an opinion that the question for the court was whether federal courts can "resolve the parties' constitutional challenges to the Commissions' structure." "The answer is yes," she wrote, saying federal courts are not barred from "entertaining these extraordinary claims."

The cases the court ruled in are Axon Enterprise v. Federal Trade Commission, 21-86, and Securities and Exchange Commission et. al. v. Cochran, 21-1239.