A federal court on Monday blocked new Biden administration rules aimed at forgiving the debt of student borrowers who attended colleges that misled them or closed suddenly.

The move by the U.S. Court of Appeals for the 5th Circuit, by a panel comprised of Republican presidential appointees, was in response to a request from Career Colleges and Schools of Texas for a nationwide injunction on the new version of so-called borrower defense rules. The Biden administration’s version of the rules ease and clarify the process for securing that relief, including by allowing borrowers to submit claims if they believe they were misled by their institution.

CCST represents private career-oriented or trade schools in the Lone Star state, many of them for-profit colleges. Individuals who attend for-profit schools are disproportionately likely to take and default on student loan debt, in large part because they promise lucrative outcomes but have a track record of seldom producing those results. Federal policies have been developed over the years in an effort to relieve such borrowers of that debt.

The U.S. Education Department under President Joe Biden has worked to add to that pile of policies, including with its own borrower defense to repayment rule. Through borrower defense to repayment – or borrower defense for short – students who have been defrauded by their schools have their loans discharged.

When CCST filed its lawsuit earlier this year on behalf of more than 70 Texas institutions, it said the Education Department’s rule was created “with a thumb on the scale to maximize the number of approved claims and, ultimately, further the administration’s loan forgiveness agenda.”

Federal law has long allowed the discharge of loans for borrowers who have been misled or defrauded by their colleges. But getting loans canceled has been arduous and in many cases involved lawsuits against the federal government.

Biden has been applying this authority incrementally. In a settlement for a case that traces back to the Trump presidency known as Sweet v. Cardona, Biden agreed to forgive $6 billion in debt relief for nearly 300,000 borrowers, for example. That relief isn’t affected by Monday’s injunction. Still, the group behind that push for relief was frustrated by the block of Biden-era rules.“It is necessary to protect students from being scammed and it ensures that predatory actions come to light and are stopped before they go on to harm even more students,” said Eileen Connor, president and director of the Project on Predatory Student Lending, in a statement. "These organized, well-funded political attempts to weaponize the court system against the legal rights of borrowers underscore how stacked the system is against our clients.Also last month, the administration announced forgiveness for another 7,400 defrauded student borrowers in Colorado.

All in all, the administration has forgiven roughly $14.7 billion in loans for defrauded student borrowers. Nearly half a million borrowers had submitted borrower defense claims and had pending applications as of January 2023.

The ruling Monday delays the start of Biden’s regulations, which also include automatic relief for borrowers whose institutions were closed.

Advocates in favor of debt relief lamented the decision and stressed the importance of strong borrower defense policies. “We cannot afford a green light for dishonest schools to continue harming students,” said Aaron Ament, president of Student Defense, in a statement. "Defrauded borrowers are legally entitled to relief and their institutions should be held accountable. Until these protections are restored, countless students are at risk of being taken advantage of by higher ed profiteers who are exploiting students with little accountability.”

  • OhStopYellingAtMe@lemmy.world
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    1 year ago

    Republicans would poison the village well just to make a Democrat mayor look bad as they & everyone around them lay dying.

    • AllonzeeLV@lemmy.world
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      1 year ago

      I think we can just safely say our judicial system has lost all credibility of being just.

      American law enforcement and judicial system run purely on threat of state sanctioned violence at this point, and that’s really disheartening.

    • Alien Nathan Edward@lemm.ee
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      1 year ago

      It was going to happen eventually. They’ve been less and less popular since Reagan left office as their greed, aggression and anti-American principles came to the forefront. The last two Republicans to actually win a presidential election were Bush in 04 and Bush in 92. Ken Paxton actually bragged in Texas that his voter suppression campaign is the reason the state didn’t go blue. You’ll notice that he’s on trial for corruption now.

      Point is: theyve known for a long time that they’re not gonna be able to depend on popularity among voters to maintain power, so they’ve gone mask off. They’re gerrymandering, they’re suppressing votes. Hell, the trump white house decided not to respond to COVID at least in part because plagues tend to run through more populous areas so they thought it would kill more democrats. The supreme court stopped just short of giving the Republican controlled state legislatures the ability to ignore the results of an election entirely, but Republicans are ignoring supreme court orders to redraw gerrymandered maps and put together fake electors in 2020 anyway so let’s see what (if any) consequences arise if they continue to ignore the law. Democracy has become incompatible with their continued power, and there was never any doubt that Republicans weren’t going to give up power unless forced to.

  • porkins@sh.itjust.works
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    1 year ago

    We cannot afford a green light for dishonest schools to continue harming students

    This also should apply to skyrocketing tuition rates due to the institutions knowing that students would be pressured to take the predatory government loans. The government shouldn’t have been willing to pay that much to begin with, which would force the universities to lower their rates.

  • kitonthenet@kbin.social
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    1 year ago

    forgive it anyway. We are not ruled by these septuagenarian fucks who can’t stomach even the tiniest bit of mercy for anyone but the ultra rich

  • lolola@lemmy.world
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    When CCST filed its lawsuit earlier this year on behalf of more than 70 Texas institutions, it said the Education Department’s rule was created “with a thumb on the scale to maximize the number of approved claims and, ultimately, further the administration’s loan forgiveness agenda.”

    Yes.

    • jeffw@lemmy.worldOP
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      It’s basically a self-own too. “No, the federal government can’t unfairly attack shitty schools like us!”

  • JakenVeina@lemm.ee
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    1 year ago

    I really appreciate how this move dismantles the most common conservative arguments against student debt forgiveness.

    • quicksand@lemm.ee
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      1 year ago

      Without hypocrisy, how can they define themselves? It would be Nihilism. We can’t let cancel culture take away the only thing they have left

  • TIEPilot@lemmy.world
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    1 year ago

    How about we go after the core of this problem, the inflation of the cost of college? It makes no sense the inflation of a four year degree in the last twenty years. Its perverse.

    • jeffw@lemmy.worldOP
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      1 year ago

      We can walk and chew gum. Although, in this case, congress isn’t doing any walking, so all we have is the gum option.

    • Igotz80HDnImWinning@kbin.social
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      1 year ago

      Drop interest rates and minimum payments to zero. No debt forgiven but all these assholes who are knee deep in Student Loan Asset Backed Securities (SLABS) lose their $$. Then don’t bail them out so they can’t lobby congress to eliminate student debt anymore. Problem solved.

      • TIEPilot@lemmy.world
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        1 year ago

        I’m fine w/ lowering the interest rates, then also putting strangle hold on new loans. Or we are going to keep this BS flowing.

        BSEE = loan

        Underwater basket weaving = you need 50% down.

    • Hairyblue@kbin.social
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      1 year ago

      I think there should be free public colleges. Other countries do it. We should too.

      Also government healthcare too.

      Stop voting for Republicans. They don’t want government to help people.

    • tallwookie@lemmy.world
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      1 year ago

      or perhaps we should just steer more folks to trades jobs, and not the 4 year college track.