Once again, a federal court has temporarily halted the U.S. Department of Education’s to the attempt of biden to cancel student loans debt.
Federal Court Halted the Attempt of Biden to Cancel Student Loan Debt
Two conservative organizations have petitioned a federal court to halt the Attempt by Biden to Cancel Student Loan Debt of $39 billion for over 800,000 borrowers. Filed in Michigan, the lawsuit asserts that the administration exceeded its authority by announcing the debt forgiveness in July, shortly after the Supreme Court invalidated a broader cancellation initiative advocated by President Joe Biden, according to ABC News.
Introduced in November 2022, the rule aimed to meet a directive in the Higher Education Act, where the education secretary must identify notable school-related wrongdoing for loan cancellation. The court ruling stems from a challenge by for-profit entities, the Career Colleges, and Schools of Texas, against a Department of Education rule affecting multiple facets, including defenses for federal student loan non-repayment. It requests a court to declare the cancellation unlawful and halt its execution by the Education Department until the case is resolved. The Education Department criticizes the lawsuit, seeing it as a last effort by conservative organizations to keep many borrowers in debt. The New Civil Liberties Alliance filed the case on behalf of the Mackinac Center for Public Policy and the Cato Institute.
More About the Attempt by Biden to Cancel Student Loan Debt
The department has gone far beyond its authority. It’s acting like Congress by allowing borrowers to ask for loan forgiveness, even though Congress only allowed them to have defenses. Normally, a legal claim is about asserting a right, but in loans, the lender has the right to be repaid, and the borrower must repay. So, a borrower’s claim for forgiveness doesn’t make sense it’s like trying to avoid repaying instead of standing up for a right.
The plaintiffs are trying to prevent the new rule from being used. They say the rule goes beyond what the Higher Education Act allows and breaks both the Constitution and the Administrative Procedure Act, which is the law that says how government agencies can make rules. In simpler terms, they’re saying that both the content of the rules and the way they were made are against the law.
On July 14, the Biden administration revealed its intention to forgive loans for 804,000 borrowers in income-driven repayment plans. These plans had initially promised Biden to Cancel Student Loan Debt after 20 or 25 years of payments, but mistakes in previous management led to incorrect payment counts, hindering borrowers’ journey towards forgiveness, according to the department. This is a beginning stage in the legal process, and it looks positive. The same group of three judges will listen to the case again in November. After that, they will make a final decision about the case. The initial sign from the 5th Circuit is that, as we’ve seen before, the Biden administration has gone way beyond what it’s allowed to do.