A federal appeals court has halted one of Joe Biden’s student loan bailout programs.
On Thursday, the Fifth Circuit Court of Appeals halted Biden’s proposal to forgive loans for borrowers who allege they were victims of ‘misleading information’ by colleges.
A three-judge panel, consisting of one appointee from the Reagan era and two appointed during the Trump administration, declared Biden’s program ‘almost certainly unlawful.
As reported by ABC News:
A Biden administration plan to provide student debt relief for people who say they were victims of misleading information by trade schools or colleges is “almost certainly unlawful” a federal appeals court said in a ruling blocking enforcement of the policy against a group of privately owned Texas institutions.
The 5th U.S. Circuit Court of Appeal ruling, dated Thursday, came in a court challenge filed by Career Colleges and Schools of Texas. The panel sent the case back to a lower court, saying the judge should issue an injunction against enforcement while the appeal continues.
At issue are rules that broadened existing policy, affecting students who borrowed money to attend colleges and universities that are determined to have misled them on matters such as whether their courses would actually prepare them for employment in their field or the likely salary they would earn upon obtaining a degree.
According to the opinion, if a federal student loan is discharged under the policy, the government can seek reimbursement from the school accused of the misleading practices.
Biden has employed various strategies to bypass the Supreme Court’s ruling invalidating his student loan forgiveness program.
Last year, the Supreme Court voted 6-3 to reject Joe Biden’s student loan relief program. In response, the Department of Education introduced a workaround forbearance program. This program aims to cancel $39 billion in student loans by counting non-payments as if they were payments made over time.
But this isn’t your usual forbearance plan. Borrowers won’t need to repay the “missed” payments or cover the shortfall from “reduced” payments. Plus, no interest will accumulate on any of the missed payments.
In January, Biden independently forgave an additional $5 billion in student loan debt for 74,000 borrowers, in what critics are calling his latest attempt at garnering votes through strategic actions.
“The latest round of student debt cancelation brings the total amount canceled under Biden to $136.6 billion for more than 3.7 million Americans, according to the Department of Education. It comes after the U.S. Supreme Court blocked Biden’s initial student loan handout last year, which would have cost more than $400 billion,” Fox Business reported.
Joe Biden has also announced his intention to forgive student loans for borrowers who borrowed less than $12,000 and have been repaying them for a decade.
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