(Reuters) – A federal appeals court on Monday granted an emergency injunction blocking the Biden administration’s effort to facilitate loan forgiveness for individuals defrauded by their schools.
The New Orleans-based 5th U.S. Circuit Court of Appeals, responding to a request from trade group Career Colleges and Schools of Texas (CCST), temporarily halted the implementation of the rule until the appeal is heard in November.
The three-judge panel, consisting of Edith Jones, Kyle Duncan, and Cory Wilson, appointed by Republican presidents, did not provide a reason for the injunction.
This rule is separate from President Biden’s comprehensive plan for student debt relief. In June, the Supreme Court prevented the cancellation of $430 billion in student loan debt for 43 million borrowers. President Biden has since outlined an alternative solution for providing relief to student loan borrowers.
This is not the first time the 5th Circuit has delayed the implementation of the regulation. Previously, the panel administratively stayed the rule to consider CCST’s request for the injunction.
CCST filed a lawsuit in February against the U.S. Department of Education after the department finalized a rule in October amending the “borrower defense to repayment” program. This program allows students to seek debt relief if their schools engage in misleading practices.
The Biden administration’s rule modified the grounds for borrower relief, established new procedures for reviewing claims, and provided a means for the agency to grant relief to groups of students from a single institution.
CCST argues that the rule is illegal and unconstitutional as it aims to achieve extensive loan forgiveness for borrowers while transferring the financial burden to higher education institutions.
The CCST and the U.S. Department of Education did not respond to requests for comment.
(Reporting by Nate Raymond in Boston; Editing by Alistair Bell)
Credit: The Star : News Feed
