The Supreme Court is reviewing the stalled Biden student debt relief rule

The U.S. Supreme Court said Friday it will review a lower court’s decision to block a Biden administration decision that helped forgive student debt of borrowers defrauded by their colleges.

With President Joe Biden set to leave office in nearly a week, the Supreme Court’s final opinion could affect his legacy in curbing student loan debt, which the Democrat viewed as a key priority of his White House agenda.

The Supreme Court has repeatedly overturned Biden’s student debt relief plans throughout his term. In 2023, the court blocked the government from forgiving $400 billion in debt, dashing the hopes of borrowers across the country. In August, judges rejected another government proposal to lower monthly payments and speed up lending.

The Biden rule at issue this time involves “borrower defense,” a process that allows borrowers to petition the government to cancel some or all of their student debt if they can prove that their College committed “certain types of misconduct,” including “misrepresentation.” the career prospects of graduates,” according to the Government Accountability Office.

Although defrauded borrowers have historically had channels to seek loan forgiveness, the application process is often lengthy and difficult, leading to lawsuits. According to the office, as of April 30 last year, the Biden administration had forgiven $17.2 billion in federal student loans for 974,820 borrowers who claimed they were defrauded.

More:As time runs out, Biden is abandoning student loan relief proposals he praised

A Republican presidential-appointed panel of judges on the U.S. Court of Appeals for the 5th Circuit in New Orleans blocked the rule in 2023 after Career Colleges and Schools of Texas, a group of for-profit career and vocational schools in the state, filed a request for a preliminary injunction. They said the rule makes it too easy for borrowers to claim fraud.

The settlement “sets a benchmark to maximize the number of approved claims and ultimately advance the administration’s loan forgiveness agenda,” CCST wrote in its motion for a preliminary injunction on behalf of more than 70 institutions in Texas.

Biden quietly rejects debt relief proposals

Biden has frequently touted his legislative successes on the issue, and his administration has eliminated $166 billion in debt for about 4.4 million borrowers, according to the Education Department.

But last month the department quietly withdrew its latest proposals that would have paid off the debts of tens of millions of Americans, saying it had neither the time nor the resources to push them through before President-elect Donald Trump’s Jan. 20 inauguration.

The plans would have forgiven up to $20,000 in unpaid interest for more than 20 million borrowers and would have forgiven debt for borrowers who defaulted on their loans within two years. Another plan would have allowed borrowers facing economic hardship due to medical debt, natural disasters or other circumstances to apply for relief.

Opportunities for student loan borrowers to have their loans forgiven may narrow once Trump takes office. Under former Education Secretary Betsy DeVos, the department rejected 94% of a backlog of 160,000 defense requests from borrowers at a “breaking pace,” according to a 2020 ruling by a federal judge.

According to the Pew Research Center, Americans owe about $1.6 trillion in student loans, a 42% increase from a decade ago. According to the Education Data Initiative, the average student borrower owes $40,681.

The Supreme Court is reviewing the stalled Biden student debt relief rule

ByAmelia Journalton

By Amelia Journalton

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