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GOP-led states block Biden’s latest student debt relief plan
Bạn đang xem: Supreme Court to review stalled Biden rule on student debt relief
Touted the most affordable student loan repayment plan ever, the SAVE plan would have provided debt relief to over 30 million Americans.
The U.S. Supreme Court said on Friday it will review a lower court’s decision to block a Biden administration rule that helped forgive student debt held by borrowers who were defrauded by their colleges.
With President Joe Biden set to step down from office in nearly a week, the Supreme Court’s ultimate opinion could influence his legacy on curbing student loan debt, which the Democrat held up as a key priority in his White House agenda.
The Supreme Court has repeatedly quashed Biden’s student debt forgiveness plans throughout his time in office. In 2023, the court stopped the administration from forgiving $400 billion in debt and dashing the hopes of borrowers nationwide. In August, the justices shut down another proposal by the administration to lower monthly payments and speed up loan forgiveness.
The Biden rule at issue this time involves “borrower defense,” a process allowing borrowers to submit claims for the government to cancel some or all of their student debt if they can prove their college engaged in “certain kinds of misconduct,” including “misrepresenting graduates’ job prospects,” according to the Government Accountability Office.
Although defrauded borrowers have historically had channels to claim loan forgiveness, the application process is often lengthy and difficult, triggering lawsuits. 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, according to the office.
A panel of judges appointed by Republican presidents 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, which represents a group of for-profit career and trade schools in the state, filed a request for an injunction. They said the rule made it too easy for borrowers to claim fraud.
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The rule put “a thumb on the scale to maximize the number of approved claims and, ultimately, further the administration’s loan forgiveness agenda,” CCST wrote in its injunction request on behalf of more than 70 institutions in Texas.
Biden quietly shuts down debt cancellation proposals
Biden has frequently touted his legislative achievements on the issue, and his administration wiped away $166 billion in debt for about 4.4 million borrowers, according to Department of Education data.
But last month, the department quietly withdrew its newest proposals that would have cleared debts for tens of millions of Americans, saying it didn’t have the time or resources to push them through before President-elect Donald Trump’s inauguration on Jan. 20.
The plans would have forgiven up to $20,000 of unpaid interest for more than 20 million borrowers and canceled debts for borrowers facing a default on their loans within two years. Another plan would have allowed borrowers in dire economic straits due to medical debt, natural disasters, and other conditions to apply for relief.
Avenues for student borrowers to seek forgiveness for their loans could narrow with Trump in office. Under former Secretary of Education Betsy DeVos, the department rejected 94% of a backlog of 160,000 borrower defense claims at a “blistering pace,” according to a federal judge’s ruling in 2020.
Americans owe around $1.6 trillion in student loans, a 42% rise from a decade ago, according to the Pew Research Center. The average student borrower owes $40,681, according to the Education Data Initiative.
Nguồn: https://marketeconomy.monster
Danh mục: News