Saturday, 02 Nov 2024

Biden's student loan policies continue to face legal challenges


Biden's student loan policies continue to face legal challenges
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Legal challenges are continuing to target some of President Joe Biden's student loan policies.

While the president's major student loan forgiveness program was blocked by the Supreme Court in late June, the Biden administration is also facing lawsuits over some of its other policy changes aimed at making it easier for borrowers to pay back their loans.

On Monday, the US 5th Circuit Court of Appeals temporarily blocked new provisions that were meant to be implemented in July, which would make it easier for borrowers to get their debts erased when they're misled or defrauded by their college under a rule known as borrower defense to repayment.

The rule has been in place for decades. But the lawsuit targets new provisions - including one allowing for automatic debt discharges a year after a college's closure date and another that bans colleges from requiring borrowers to agree to mandatory arbitration - which are now blocked.

The emergency injunction request was made by Career Colleges and Schools of Texas, a group of for-profit universities. The appeals court order did not explain the reasoning for the decision but said that the case will be heard on November 6.

Student loan borrowers may still submit applications for debt relief under the borrower defense rule during this time, but the Department of Education "will not adjudicate or process affected applications under the new regulations while the court's order is in place," according to the agency's website.

Aaron Ament, president of the nonprofit National Student Legal Defense Network, warned that "countless students are at risk of being taken advantage of by higher ed profiteers" until the protections are restored.

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