A federal appeals court blocked President Biden’s administration from implementing rules aimed at providing debt relief to student loan borrowers who were misled by their colleges Monday.
The ruling from the 5th Circuit Court of Appeals is the latest defeat for Biden’s efforts to forgive student loans across the country. The court granted a request from a for-profit college in Texas seeking an injunction against the administration’s rule change.
The block is temporary, and the three-judge panel will hear the case in full later this year.
The Biden administration’s rule changes would have expanded the number of student loan borrowers who are eligible for debt relief as well as facilitated the application process for obtaining relief.
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Biden has made several pushes to forgive student loans since entering office in 2021, in addition to drastically extending a freeze on payments to lenders. The Supreme Court struck down his effort to provide nationwide relief in June, however.
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Biden’s initial plan was expected to cost upward of $400 billion. He released a pared back version in July that was expected to cost taxpayers some $39 billion.
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Biden’s administration had relied on a federal statute, called the HEROES Act, to enact the first plan, claiming the law gave the secretary of education power to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs… as the secretary deems necessary in connection with a war or other military national emergency.”
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The court majority shot down that argument, however, saying, “The authority to ‘modify’ statutes and regulations allows the Secretary to make modest adjustments and additions to existing regulations, not transform them.”
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