— “The executive branch does not have unlimited policymaking power, nor an unlimited bank account to forgive student loan debt,” Ohio Attorney General Dave Yost, who led the coalition of 20 Republican state attorneys general in filing the amicus brief, said in a statement. “The executive branch cannot extend its authority as it sees fit.” — The latest case to reach the Supreme Court is ostensibly about a class-action settlement the Biden administration reached last year with student loan borrowers who claimed they were defrauded by their college. The Education Department agreed to discharge more than $6 billion of debt owed by more than 200,000 borrowers who attended one of about 150 schools, mostly for-profit colleges. The department says it has the power to do so under the Higher Education Act’s “settlement” authority. — Three colleges — Everglades College Inc., Lincoln Educational Services Corporation and American National University — claim they’re being unfairly maligned by the settlement and are asking the court to stop it. A key part of the argument by the colleges is that the Biden administration’s use of the Higher Education Act to justify debt relief under the settlement is illegal. — “Why is this case important? Well, this case is the backup plan” for Biden’s mass student debt cancellation, said Jesse Panuccio, a former top Justice Department official during the Trump administration, who represents Everglades College. Speaking during a Federalist Society webinar on the case last month, Panuccio, a partner at Boies Schiller Flexner LLP, said the legal justification for the settlement “may eventually become the lead theory” for mass debt cancellation. “As soon as the Supreme Court says, ‘you can’t do this under the HEROES Act,’ the Department of Education is going to pivot and say, ‘no problem, we can do this under the HEA’,” Panuccio said, adding that the administration may reason: “if we can do this for this settlement, we can cancel all student loans.” — Attorneys for the student borrowers are firing back. "These Attorneys General are inserting their political agenda in a legal case that has nothing to do with broad-based debt cancellation, on behalf of three institutions who have never once shown that they have standing in this case,” said Eileen Connor, president and director of the Project on Predatory Student Lending, which represents the borrowers. She said her clients are seeking a “fair resolution” of their student loan fraud claims, which in some cases have been pending at the Education Department since the Obama administration. — Where things stand: A federal judge in California earlier this year rejected the three colleges’ objections and approved the settlement. Last month, the 9th Circuit Court of Appeals declined to immediately stop the settlement as it hears the colleges appeals. So last week, the colleges filed an emergency request for the Supreme Court to intervene. — What to watch this week: The Biden administration and student loan borrowers are set to respond to the request for the Supreme Court to intervene in the case by Wednesday at noon. In lower courts, the Biden administration has argued that the Higher Education Act gives the education secretary “broad” powers and “considerable discretion” to compromise and settle student debt owed to the federal government. The Education Department also noted that it has previously discharged some $11.6 billion of debt under the HEA’s “compromise” authority for about 883,000 borrowers, including during the Trump administration. IT’S MONDAY, APRIL 10. WELCOME TO MORNING EDUCATION. Please send tips and feedback to the POLITICO education team: Michael Stratford (mstratford@politico.com), Mackenzie Wilkes (mwilkes@politico.com), Juan Perez Jr. (jperez@politico.com) and Bianca Quilantan (bquilantan@politico.com). Follow us on Twitter: @Morning_Edu and @POLITICOPro.
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