A federal appeals court granted an injunction to block President Joe Biden’s new rules that intend to make it easier for student borrowers to have their debts relieved if they were misled or defrauded by a university.
A three-judge panel on the U.S. Court of Appeals for the 5th Circuit granted an injunction request by Career Colleges & Schools of Texas, a group that leads more than 70 for-profit higher education institutions in Texas, while the ruling is under appeal.
UP FOR DEBATE: TRUMP, DESANTIS, AND 2024 GOP HOPEFULS’ STANCE ON SPENDING AND DEBT
The two-page order did not explain the reasoning for the decision but noted that the case would be heard this 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,” according to the brief decision.
The group’s lawsuit stems from an April filing against the Education Department. The Biden administration rules went into effect in July and aims to expand the number of circumstances that justify loan relief.
The Biden administration’s policy, known as “borrower defense to repayment,” expands the number of types of college misconduct that trigger loan forgiveness and provides more relief to defrauded borrowers while easing the process for applications. It also makes it easier for borrowers to obtain relief if their institutions close suddenly.
“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,” according to a statement from Career Education Colleges and Universities.
“Imposing these two provisions would have been detrimental to career schools in Texas and across the country,” CECU President and CEO Jason Altmire said.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
In June, the Supreme Court struck down Biden’s broad loan forgiveness plan that aimed to forgive up to $20,000 in student debt for millions of borrowers.
The 5th Circuit arguments over the new plan will take place in November.
