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 , 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.
Student loan borrowers gather near the White House to tell President Joe Biden to cancel student debt on May 12, 2020, in Washington, D.C. A conservative three-judge panel on Monday blocked new rules enacted by the Department of Education to make it easier for student-loan borrowers who were defrauded by the school they attended to have their debt eliminated.
"The Rule imposes strict liability upon schools for even unintentional erroneous representations or omissions, and then irrationally presumes that every borrower in the group would not have attended the school but for the school's act or omission, whatever it is," the complaint read.