The Supreme Court is set to review a lower court’s decision that blocked a Biden administration rule designed to make it easier for student loan borrowers defrauded by their colleges to have their loans forgiven. As of April, the Biden administration has forgiven over $17 billion in student loans under the borrower defense rule, which has been in effect since 1994 and revised in 2016, 2019, and 2022. The 2022 revision aimed to clarify the grounds for filing a claim and took effect in 2023.

Jason Altmire, president and CEO of Career Education Colleges and Universities, stated that the Supreme Court’s decision to hear the case does not validate the Biden administration’s arguments. “It simply means that the Supreme Court will hear arguments as to the scope of the Department of Education’s authority related to [the borrower defense rule],” Altmire said. He believes the facts will show that the rule exceeded the agency’s authority.

In 2023, Career Colleges and Schools of Texas sued the Biden administration, arguing that the borrower defense process was too lenient. The 5th U.S. Circuit Court of Appeals sided with CCST, blocking the rule from taking effect nationwide. The lower court ruled that the Department of Education could not grant relief unless a borrower had defaulted and the government had sued to collect the loan.

Borrower defense applications surged in 2015 after widespread fraud led to the collapse of Corinthian Colleges. By June 2019, the Department of Education had a backlog of over 210,000 pending applications, prompting a class-action suit alleging unlawful delays in borrower relief.

The Supreme Court will determine whether the lower court erred in ruling that the Higher Education Act of 1965 does not allow borrowers to file for borrower defense before default. Student debt relief advocates argue that the lower court’s ruling was too harsh. Eileen Connor, president of the Project on Predatory Student Lending, stated, “The reason the administration wanted the Supreme Court to look at the case is because it’s fundamentally wrong and stripping away a critical protection for students that Congress inarguably authorized.”