Appeals court blocks Biden’s student debt relief policy.
Federal Appeals Court Blocks Biden’s Student Loan Relief Rules
A federal appeals court has granted an injunction to block President Joe Biden’s new rules aimed at providing easier debt relief for student borrowers who were misled or defrauded by universities.
The U.S. Court of Appeals for the 5th Circuit, in a decision made by a three-judge panel, granted the injunction request by Career Colleges & Schools of Texas, a group representing over 70 for-profit higher education institutions in Texas. The ruling will remain in effect while the case is under appeal.
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The reasoning behind the decision was not explained in the two-page order, but it was noted that the case will be heard in the fall.
“It is ordered that appellant’s opposed emergency motion for injunction pending appeal of the borrower-defense and closed-school provisions of a ‘rule’ governing student loan discharges is GRANTED,”
The lawsuit filed by the group against the Education Department dates back to April. The Biden administration’s rules, which came into effect in July, aim to expand the circumstances under which loan relief can be granted.
The policy, known as “borrower defense to repayment,” broadens the types of college misconduct that can trigger loan forgiveness and provides more relief to defrauded borrowers. It also simplifies the application process and makes it easier for borrowers to obtain relief if their institutions suddenly close.
“We are pleased that the Fifth Circuit has ruled in favor of delaying the onset of the borrower defense to repayment and closed school discharge regulations,”
said Career Education Colleges and Universities in a statement. The President and CEO of CECU, Jason Altmire, added that implementing these provisions would have had a detrimental impact on career schools in Texas and across the country.
In June, the Supreme Court struck down Biden’s plan for broad loan forgiveness, which aimed to forgive up to $20,000 in student debt for millions of borrowers.
The arguments over the new plan in the 5th Circuit will take place in November.
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