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Round-up: Student Loan Debt Relief - November 18, 2022

November 18, 2022

The Biden Administration’s efforts to address the nation’s student loan debt moved forward yesterday in two areas: bankruptcy reform and settlement of $6 billion in borrower defense claims.  At the same time, the Education Department intends to appeal one of the injunctions issued by a federal court against the Bident Administration’s student loan debt relief plan to the U.S. Supreme Court.
 
In new guidance issued Thursday by the Departments of Justice and Education, the departments seek to “ensure consistent treatment of the discharge of federal student loans, reduce the burden on borrowers of pursuing such proceedings, and make it easier to identify cases where discharge is appropriate.”  The new guidance provides Justice Department lawyers with standards and criteria to use in deciding whether to recommend whether the student loans should be discharged. Currently, borrowers have to show that they would suffer “undue hardship” if the student loans are not discharged—a higher bar than for other types of debt. The guidance applies to future and pending cases.
 
A federal judge approved a settlement agreement in a class action lawsuit against the U.S. Department of Education brought by 200,000 borrowers who attended one of 153 institutions. The plaintiffs will see all of their federal student loans discharged. Another 64,000 borrowers will receive final decisions on their borrower-defense claims. Most of the institutions listed are for-profit colleges or universities.
 
Finally, the Justice Department will ask the Supreme Court to lift an injunction currently blocking its debt-relief plan issued by the U.S. Court of Appeals for the Eighth Circuit, which sided with six states that sued to prevent the administration from forgiving up to $20,000 in federal student loans for eligible Americans.
 
Below is a sampling of how the national media covered these developments:
 
Biden Administration Could Make It Easier to Discharge Student Loan Debt in Bankruptcy
The Washington Post (November 18, 2022)
 
Biden Administration to Make It Easier to Dismiss Student Loans in Bankruptcy
The Wall Street Journal (November 18, 2022)
 
Biden Administration Offers New Path to Discharging Student Debt in Bankruptcy
The New York Times (November 18, 2022)
 
Is Student Loan Forgiveness Dead? Hope Is Dwindling, But Here Are Biden's Remaining Options
USA Today (November 17, 2022)
 
Biden to Ask Supreme Court to Reverse Injunction
Inside Higher Ed (November 18, 2022)
 
Biden Admin to Ask High Court to Take Up Student Debt Plan
Associated Press (November 17, 2022)
 
Justice Department Signals It Plans to Ask the Supreme Court to Reinstate Biden’s Student Debt Relief Program
CNN (November 17, 2022)
 
Biden Administration Looks to Supreme Court to Continue Student Debt Relief Program
The Hill.com (November 18, 2022)

Biden Admin to Ask SCOTUS to Weigh In on Student Loan Relief Plan
Axios (November 18, 2022)
 
 
Statement from U.S. Secretary of Education Miguel Cardona on Federal Court Decision on the Sweet Settlement
U.S. Department of Education (November 17, 2022)
 
Judge Grants Final Approval of $6 Billion Student Loan Settlement
The Washington Post (November 17, 2022)
 
Borrower-Defense Settlement to Discharge $6 Billion in Loans
Inside Higher Ed (November 18, 2022)
 
 
With Student Loan Forgiveness in Legal Limbo, Scammers Pounce
The Wall Street Journal (November 18, 2022)
 

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