WASHINGTON (NEXSTAR) — Another federal student loan forgiveness program may be in legal trouble.
An appeals court in Texas blocked a Biden administration rule to help out students who claim they were misled and defrauded by for-profit schools.
“We’re talking about veterans who were preyed upon. Their money was taken, their benefits were taken and they were never given a degree,” Education Secretary Miguel Cardona said.
Cardona is vowing to put up a fight in court.
Already, the Biden administration has approved roughly $13 billion in debt forgiveness for defrauded students, and about half have had their debts cleared.
“We hear from students every day,” said Aaron Ament, president of the National Student Legal Defense Network.
Student Defense said the new rules would speed up the process, expand the number of students eligible for forgiveness and put for-profit schools on the hook for repayment.
But the group challenging the rules argues they go too far.
In the lawsuit, Career Colleges and Schools of Texas said the rule change would cause financial and reputational harm to for-profit schools and is “enormous executive overreach.”
“The administration is very much overreading the statute on the books,” said Jack Fitzhenry with The Heritage Foundation, a conservative organization.
Fitzhenry said this is the latest example of the White House overextending its authority without buy-in from Congress.
“This is part of one cohesive, if not coherent strategy,” he said.
Fitzhenry said he would not be surprised if the court battle makes it to the Supreme Court.
While the new standards are on hold, eligible students can still apply for forgiveness under the previous program rules.