G. McConway
August 9, 2023

Biden Student Loan Relief Plan Blocked by Federal Appeals Court

Joe Biden has taken it on the chin again with a different form of student loan relief.

Ultimately, I think he will win this case (as long as they are not getting cute with the rules), but the fact the program is now on hold is not a good look for Joe Biden and his administration.

This plan was to forgive student loans for students who were misled by their colleges, reported Fox Business.

Precedent Set

The 5th Circuit Court of Appeals has permitted an injunction request by a for-profit school in Texas to fight the rule change.

The ruling is only temporary, however, as the court will hear arguments in the case later this year.

The new rule would have extended the number of students eligible for the program.

Now, as I stated, there is precedent here, but this will depend on how loose Biden is getting for the relief rules. If he is trying to get crafty since his main student loan relief program was shot down, this may not go as easy as I initially thought.

Biden's initial plan had a price tag of about $400 billion, but this new rule will cost us about $39 billion if Biden is successful in court.

Biden initially failed because he was abusing the HEROES Act, trying to say that the Secretary of Education had the power for blanket forgiveness during a time of emergency, of which Biden was pointing to the COVID pandemic to support his claim.

The court disagreed, stating, "The authority to 'modify' statutes and regulations allows the Secretary to make modest adjustments and additions to existing regulations, not transform them."

So, Biden will now chip away at student loan debt with new rules like this.

Now, if you remember, the precedent that I am referring to was in June 2022, when 200,000 borrowers were given forgiveness for $6 billion in loans for more than 150 schools that were involved in a class action lawsuit.

At the time, the New York Times reported nearly all of which are for-profit colleges and vocational programs. These were largely vocational schools, most of which had gone out of business. But some of the schools, such as the University of Phoenix, Grand Canyon University, and DeVry University are still operational.

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