The Supreme Court said Friday it will consider an appeal by the Biden administration defending its plan to ease applications to the Borrower Defense student debt relief program.
The program allows students defrauded by their schools, such as Corinthian Colleges and ITT Technical Institute, to receive loan forgiveness.
Corinthian Colleges and ITT Technical Institute were among major national for-profit colleges that were accused of widespread misconduct, including false advertising and misrepresentations about career and earnings prospects. The schools closed several years ago following multiple investigations.
In April, a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans unanimously issued a preliminary injunction against the Biden administration's regulations, siding with a group of Texas schools that filed a lawsuit and reversing a district court's ruling. The court ruled the Biden administration's regulations exceeded what Congress authorized.
In a brief order Friday, the Supreme Court agreed to review the 5th Circuit's ruling, meaning it could be heard this term, which would result in oral arguments this spring and a decision by early summer, The Hill reported.
The Department of Education argued to the Supreme Court that the plaintiffs, Career Colleges and Schools of Texas, do not have standing and the new rule is legal under the Higher Education Act.
"The Education Act also makes clear that the Department may assess borrower defenses in administrative proceedings invoked by a borrower's request. Indeed, Congress necessarily would have understood that the agency would assess borrower defenses," stated a petition by the government in October 2024.
The plaintiffs said the federal government has gone beyond the scope of its powers.
"The courts play an important role in ensuring that administrative agencies heed the limits that Congress has placed upon them," the group said in a December brief.
President Joe Biden made student loan forgiveness a major platform of his administration. But the Supreme Court in June 2023 ruled 6-3 that his administration overstepped its authority when it announced that it would cancel up to $400 billion in student loans.
Since then, the Biden administration has approved $28.7 billion for 1.6 million borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements, according to the Department of Education.
Michael Katz ✉
Michael Katz is a Newsmax reporter with more than 30 years of experience reporting and editing on news, culture, and politics.
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