Judges Intervene to Pause Biden Rule Granting Student Debt Relief for Individuals Accusing Colleges of Misrepresentation

A federal appeals court in New Orleans has temporarily halted a rule implemented by President Joe Biden’s administration. This rule aimed to provide easier access to student loan debt relief for borrowers who claim they were deceived by colleges and universities about the quality of education they would receive.

The rule in question broadens the existing policy that forgives the debt of students who borrowed money to attend institutions that provided misleading information. This includes cases where students were misguided about the relevance of their courses to future employment or the expected salary after obtaining a degree.

The Career Colleges and Schools of Texas, an association representing for-profit higher learning institutions, filed a lawsuit against the rule earlier this year. One of their major concerns is that the rule covers even unintentional actions by the colleges, and they argue that it gives the Department of Education excessive power in determining claims for debt relief, which they believe is unconstitutional.

The Department of Education argues that relief granted can be appealed in federal court, providing a system of checks and balances.

The colleges involved in the lawsuit requested a federal judge in Texas to block the rule while the case is pending. The request was initially denied, but three judges from the 5th U.S. Circuit Court of Appeals issued an injunction, thereby temporarily halting the rule. The panel of judges will hear arguments on the case in November.

The three judges serving on the panel in New Orleans are Edith Jones, nominated by former President Ronald Reagan, and two nominees of former President Donald Trump, Stuart Kyle Duncan and Cory Wilson.