A major legal setback has struck at the heart of the Biden administration's efforts to alleviate the burden of student loans for millions.
According to Western Journal, the 5th U.S. Circuit Court of Appeals in New Orleans has blocked President Joe Biden's plan to cancel $430 billion in student debt, marking a pivotal moment in the legal battle over this contentious issue.
Since entering the Oval Office, President Joe Biden has made it his mission to address the overwhelming student debt crisis facing millions of Americans. His administration's latest attempt, however, faced a significant roadblock when the 5th U.S. Circuit Court of Appeals moved against it, presenting a direct challenge to the administration's ambitious goals.
The decision by the appellate court came as a response to the objections raised by Career Colleges and Schools of Texas, which argued that the debt relief plan unveiled in October 2022 overstepped the Department of Education's legal boundaries. The rule aimed to expand the criteria under which students misled by for-profit schools could seek debt cancellation. U.S. Circuit Judge Edith Jones pointed out that the career colleges' group had a strong case in arguing that the Department of Education lacked the power under the Higher Education Act to execute such a sweeping cancellation of loans.
Adding her voice to the chorus of criticism, Judge Edith Jones outlined several legal and regulatory defects she believed plagued the debt relief rule. She noted, "The contested rule finalized in October suffers from a constellation of legal problems, highlighting several statutory and regulatory discrepancies."
The Department of Education countered the legal challenge, asserting the robustness of the new rules under scrutiny. A spokesperson for the department emphasized the act's provision for borrower relief in instances where educational institutions failed to uphold their promises or abruptly ceased operations, leaving students in the lurch.
One aspect under particular scrutiny was the "borrower-defense" provision, designed to protect students who were deceived by educational institutions regarding their programs. The Biden administration's narrower application of this provision, exclusively to loans associated with Career Colleges and Schools of Texas, was particularly criticized by Judge Jones.
Despite having initially postponed action on his campaign promise to tackle student debt, Biden reignited his commitment in 2023. His administration announced plans in February to cancel debt for 100,000 borrowers, building upon a previous announcement to cancel $9 billion in debt. This was part of a broader initiative that Biden hoped would address the debt of 43 million Americans.
However, the road to debt cancellation has been fraught with opposition. Kansas Attorney General Kris Kobach led a coalition of state attorneys general in challenging the administration’s plans.
Kobach suggested political motives might underpin the administration's efforts, stating, “It may just be coincidence, or it may be that the administration is attempting to curry favor with people who have student debt.”
Despite the legal hurdles and burgeoning political controversy, Biden maintained a defiant optimism. He claimed his policies would relieve the debt of "136 million peoples’ [student] debt."
The ruling by the 5th U.S. Circuit Court of Appeals underscores the complexities and challenges of enacting widespread debt cancellation. It imparts a significant blow to Biden's aspirations, pushing the administration to reconsider its approach amid ongoing legal battles and political debates.
The battle over student debt cancellation underlines the entwined nature of law, policy, and politics. As the legal challenges continue, the Biden administration faces the daunting task of navigating a complex legal landscape to fulfill a promise that has become a cornerstone of its agenda for millions of Americans.
