WASHINGTON, April 13 (Reuters) - 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.
Three of the schools identified in the settlement - for-profit Lincoln Educational Services Corp (LINC.O) 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. Around 3,500 borrowers entitled to automatic loan discharge under the settlement attended one of the three schools.
The decision was separate from a case pending before the high court over the legality of President Joe Biden's plan to cancel $430 billion in student debt for about 40 million borrowers. A ruling in that case is expected by the end of June.
