Biden's New Student Loan Forgiveness Plan Blocked by Court

[ThatRobGuy]

Biden's new student loan forgiveness plan blocked by court

The Department of Education allegedly "stacked the deck in favor of borrowers and against schools," the complaint read.

www.newsweek.com

The judges in the Fifth Circuit Court of Appeals—all of whom were appointed by Republican presidents—blocked the new rule with a temporary injunction, pending appeal, after a request by Career Colleges and Schools of Texas (CCST), a state-led organization of 70 assorted private, post-secondary institutions that prepare students for careers in the trades.

The rules, finalized by the department in June, would have allowed borrowers to file a claim for relief if they believed a school misled them about their education or engaged in certain misconduct that was in violation of the law—allowing the department to discharge any debt the student took out to attend the school.


While I think schools should be held more accountable for misleading students about how valuable their product offerings actually are, I'm not a fan of federal force (or federal money) for loan forgiveness as the correction mechanism. I'm still a fan of the bipartisan proposal for making the schools themselves be the co-signers on student loans moving forward.

With weak standards for claims like "if they believed a school misled them about their education", it's not terribly surprising that it got shot down. Under those pretenses, virtually anyone who slacked/partied during college, and didn't end up getting gainful employment, could simply fallback on such a claim to get their "mistake" forgiven... essentially making it the equivalent of gambling without the risk of losing money.

"The casino said I had a chance to win big, I spent $300 in that slot machine and didn't win a penny, I've been misled, so I'll be taking that $300 back if you'd be so kind..."


Not to mention, this is a particular sticky wicket because what happens in the scenario where a person files such a claim for loan forgiveness, gets it approved, but then gets a job 3 months later in the field thanks to the education they received, is there any process for "student loan reinstatement" in such a circumstance?


If a student takes out the loan, gets it forgiven under the pretense of "the school misled me, this degree is useless", does the school get to nullify the degree so they can't use for future job prerequisites? Or are they still getting to keep the "product" they originally signed up to pay for?

 

[Pommer]

Biden's new student loan forgiveness plan blocked by court

The Department of Education allegedly "stacked the deck in favor of borrowers and against schools," the complaint read.

www.newsweek.com

The judges in the Fifth Circuit Court of Appeals—all of whom were appointed by Republican presidents—blocked the new rule with a temporary injunction, pending appeal, after a request by Career Colleges and Schools of Texas (CCST), a state-led organization of 70 assorted private, post-secondary institutions that prepare students for careers in the trades.

The rules, finalized by the department in June, would have allowed borrowers to file a claim for relief if they believed a school misled them about their education or engaged in certain misconduct that was in violation of the law—allowing the department to discharge any debt the student took out to attend the school.


While I think schools should be held more accountable for misleading students about how valuable their product offerings actually are, I'm not a fan of federal force (or federal money) for loan forgiveness as the correction mechanism. I'm still a fan of the bipartisan proposal for making the schools themselves be the co-signers on student loans moving forward.

With weak standards for claims like "if they believed a school misled them about their education", it's not terribly surprising that it got shot down. Under those pretenses, virtually anyone who slacked/partied during college, and didn't end up getting gainful employment, could simply fallback on such a claim to get their "mistake" forgiven... essentially making it the equivalent of gambling without the risk of losing money.

"The casino said I had a chance to win big, I spent $300 in that slot machine and didn't win a penny, I've been misled, so I'll be taking that $300 back if you'd be so kind..."


Not to mention, this is a particular sticky wicket because what happens in the scenario where a person files such a claim for loan forgiveness, gets it approved, but then gets a job 3 months later in the field thanks to the education they received, is there any process for "student loan reinstatement" in such a circumstance?


If a student takes out the loan, gets it forgiven under the pretense of "the school misled me, this degree is useless", does the school get to nullify the degree so they can't use for future job prerequisites? Or are they still getting to keep the "product" they originally signed up to pay for?

This is to be expected.
Any policy the Biden puts forth is going to be rejected and fought in court (if possible) and certainly fought on R-W media.

In its original complaint filed in February, CCST claimed that the DOE allegedly stacked the deck in favor of borrowers and against schools, arguing that the way the plan was structured would all but assure every claim would be approved—particularly under language in the rule that allowed for a sort of class-action lawsuit that opens the door for plaintiffs to sign on regardless of whether they attended the school.

Bankers want a “level playing field”.
Bankers.

 

[ThatRobGuy]

This is to be expected.
Any policy the Biden puts forth is going to be rejected and fought in court (if possible) and certainly fought on R-W media.


Bankers want a “level playing field”.
Bankers.

But I think the core issue is the weak standard

"the way the plan was structured would all but assure every claim would be approved" is an reasonable concern given that the language suggested "if the borrower believes they were misled"

There should be some sort of metric or standard that's more concrete than that.

 

[The IbanezerScrooge]

https://www.washingtonpost.com/education/2023/08/14/student-loan-forgiveness-lawsuit-dismissed/

A federal judge on Monday denied a bid by two conservative groups to block the Biden administration from canceling the federal student loans of more than 800,000 people who have been in repayment for more than 20 years.​

​

The Cato Institute and Mackinac Center for Public Policy filed a lawsuit earlier this month, saying the administration violated federal law by failing to produce the forgiveness policy through the traditional rulemaking process and offer the public the opportunity to comment. The groups also claimed the policy would harm their recruitment efforts and asked the court to stop the federal government from canceling any debt as the case proceeds.​

​

U.S. District Judge Thomas L. Ludington of the Eastern District of Michigan issued an 18-page order dismissing the case, concluding the groups lacked the standing to stop one of the administration’s latest efforts to alleviate the burden of student debt.​

 

[Green Sun]

https://www.washingtonpost.com/education/2023/08/14/student-loan-forgiveness-lawsuit-dismissed/

A federal judge on Monday denied a bid by two conservative groups to block the Biden administration from canceling the federal student loans of more than 800,000 people who have been in repayment for more than 20 years.​

​

The Cato Institute and Mackinac Center for Public Policy filed a lawsuit earlier this month, saying the administration violated federal law by failing to produce the forgiveness policy through the traditional rulemaking process and offer the public the opportunity to comment. The groups also claimed the policy would harm their recruitment efforts and asked the court to stop the federal government from canceling any debt as the case proceeds.​

​

U.S. District Judge Thomas L. Ludington of the Eastern District of Michigan issued an 18-page order dismissing the case, concluding the groups lacked the standing to stop one of the administration’s latest efforts to alleviate the burden of student debt.​

Excellent.
Income-Driven Repayment plans were put into place years and years and years ago, before I was even born. The DoE failed for years to actually process forgiveness of individuals who had made 20 years of payments (10 under PSLF programs). Those borrowers agreed to the loan repayment terms, signed contracts for said terms, and then were screwed out of it two decades in due to the DoE under Betsy Devos refusing to acknowledge their forgiveness eligibility.

I spit on both the Cato Institute and Mackinac Center for their blatant attempt to screw over borrowers.

But I think the core issue is the weak standard

"the way the plan was structured would all but assure every claim would be approved" is an reasonable concern given that the language suggested "if the borrower believes they were misled"

There should be some sort of metric or standard that's more concrete than that.

For-Profit colleges should do a better job getting accreditation and ensuring their programs are valuable first. For once, let's leave the burden of the work on the people making money off of students, it'd be an nice change of pace.

 

[friend of]

RIP gender studies and underwater basket weaving.

 

[Green Sun]

RIP gender studies and underwater basket weaving.

Way too late on this one buddy - This forgiveness plan already went through after a judge denied the Cato Institute and Mackinac Center's suit, if you saw the update 2 posts up.