(TheRedWire.com) – On Monday, a three-judge panel from the 5th U.S. Circuit Court of Appeals blocked the new student loan forgiveness plan introduced by the Department of Education. The new plan would enable borrowers defrauded by their college to eliminate their student loan debt.
The three Republican-appointed judges issued a temporary injunction, expected to face an appeal. The demand was in response to a request by Career Colleges and Schools of Texas (CCST), a state-led organization primarily focused on preparing students to enter trade careers.
The Department’s new finalized rules would have enabled borrowers to file relief claims in cases where they believe that the college they attended had misled them or had engaged in misconduct violating the law. Those students who could prove such cases would be able to get their student loan debts for attending that institution erased.
CCST had filed an original complaint in February in which they claimed that the Department of Education was deliberately creating a situation where the deck would favor the borrowers over the schools. They further pointed out that the structured plan would ensure that every claim filed would be approved. They also opposed the rule’s language as it would create a situation where class-action lawsuits could be brought where plaintiffs could sign on even if they did not attend the institution in question.
A spokesperson for the Department of Education noted that they were reviewing the injunction and that they would not stop in their efforts to address the problems surrounding predatory colleges.
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