Supreme Court will review block on borrower defense rule

The Supreme Court agreed Friday to review President Biden’s borrower-defense rule that aimed to make it easier for a defrauded student loan recipient to seek debt relief. 

The rule, finalized in October 2022, has been on hold since summer 2023 after the U.S. Court of Appeals for the Fifth Circuit put the regulations on hold. That court later granted a preliminary injunction in April, ruling that Biden’s policy had “numerous statutory and regulatory shortcomings.” 

Under the borrower defense to repayment program, borrowers can apply for debt relief if their college or university misled them or violated certain state laws. The new regulations simplified the application process for affected students and allowed the department to automatically discharge student loans in some cases.

But the appellate judges called some of Biden’s provisions “certainly unlawful” and said some of the “vague, brand new standards” would cause “immediate and irreparable injuries” to the colleges impacted by increased compliance costs.

The Biden administration appealed that decision to the high court in October. Friday’s order doesn’t say when the court will hear oral arguments.