A federal appeals court has temporarily stopped a rule implemented by President Joe Biden’s administration, which aimed to provide student loan debt relief to borrowers who claim to have received misleading information about the quality of their education.
Existing Policy Expanded
The rule in question expands on an existing policy that forgives the debt of students who borrowed money to attend colleges or universities that were found to have misled them. These misleading practices could include false promises regarding the preparedness for employment in their chosen field or the expected salary upon obtaining a degree.
Lawsuit Filed by Career Colleges and Schools of Texas
Career Colleges and Schools of Texas, an association representing for-profit higher learning institutions, filed a lawsuit against the rule earlier this year. Their main argument was that the rule is overly broad and can apply to unintentional actions made by a college. They also claimed that the rule grants excessive power to the Department of Education, allowing it to act as a court in determining eligibility for debt relief.
Relief Can Be Appealed
In response, administration lawyers clarified that any relief granted by the Department of Education can still be appealed in federal court. This statement aimed to address concerns about the lack of checks and balances in the rule.
Although a Texas-based federal judge initially refused to block the rule in a June ruling, three judges from the 5th U.S. Circuit Court of Appeals issued an injunction on Monday. The injunction prevents the rule from being enforced while the case is being evaluated. The panel of judges, comprised of Edith Jones, Stuart Kyle Duncan, and Cory Wilson, will hear arguments regarding the case in November.
This decision leaves the fate of the rule uncertain and emphasizes the ongoing debate surrounding student loan debt relief and accountability in the higher education system.