20 GOP-led states are asking the Supreme Court to halt Biden's latest student-debt cancellation for 200,000 borrowers, backing a request from 3 schools accused of defrauding their students

• A federal judge ruled that 200,000 borrowers can move forward with relief in a borrower defense settlement.
• Last month, three schools mentioned in the settlement appealed the decision to the Supreme Court.

President Joe Biden's broad student-loan forgiveness plan isn't the only relief facing legal challenges.

In 2019, a group of borrowers sued the Education Department over stalled borrower defense claims, which are claims borrowers can file if they believe they were defrauded by the school they attended, and if approved, their debt from the school would be wiped out.

The case, now known as Sweet vs. Cardona, was taken up by Biden's Education Department after it was not resolved under former President Donald Trump's, and the department agreed to a settlement that would give 200,000 borrowers in the case $6 billion in relief. Federal Judge William Alsup signed off on the settlement in November, but in January, three of the schools named in the settlement appealed the decision, requesting the relief remain paused as the legal process plays out.

The Ninth Circuit Court of Appeals rejected the schools' request, so they took matters to the Supreme Court last month — and now, 20 Republican-led states are supporting their request that the relief be paused.

"For years, the Secretary defended against these class-action claims. But once the President decided to forgive student debt by executive fiat, the Secretary had a change of heart," the states wrote in an amicus brief to the Supreme Court.

"That settlement showers class members and other borrowers with concessions and handouts beyond what the class members could have dreamt of winning after a trial," they added.

The states are supporting Lincoln Educational Services Corp, American National University, and Everglades College, who argued in their complaint that they were not given "due process" after being included in the settlement, and that all impacted schools "will immediately suffer the stigma of having all BD claims against them summarily granted—without any administrative process, judicial factfinding, or reasoned decision on the merits."

Alsup said a stay is not warranted because former Education Secretary Betsy DeVos' "improper delay and suspension of processing claims for debt relief has directly led to a specific economic injury to each class member. Unlawful delay of debt relief results in clear monetary harm."

But the 20 GOP-led states pushed back in their brief, writing that Education Secretary Miguel Cardona overstepped his authority under the Higher Education Act and that borrower defense operates on a "case-by-case basis" and does not allow for widescale relief.

"Settlements like the one approved in this case permit executive agencies to exercise what amounts to legislative power since, using these settlements, agencies can assign themselves authority to take actions Congress never approved," they wrote. "And by acquiescing in orders vacating federal rules—by collusively dismissing cases and appeals, for example—the executive branch can change federal policy without proceeding through the rigorous notice-and-comment process that Congress has required."

It's similar to an argument opponents of Biden's broader plan to cancel up to $20,000 in student debt have made. The two conservative-backed lawsuits that paused the implementation of that plan argued that the president did not have the authority to wipe out student loans for millions of borrowers without congressional approval. The Education Department has argued the relief is warranted to help borrowers recover from the pandemic, but critics have been adamant that the law does not permit such a broad scale of relief.

The Education Department has until Wednesday to file a response to the three schools' lawsuit, which currently sits with Supreme Court Justice Elena Kagan.