Last summer, the Department of Education announced it was settling the Sweet v. Cardona lawsuit, which had sought a court order to force the department to adjudicate claims made under the Borrower Defense Loan Discharge program, which allows the department to provide loan relief for students who were defrauded by their universities.The claims in Sweet v. Cardona were exclusively brought against for-profit colleges and colleges that used to be for-profit but have converted to nonprofit status.
Arthur Keiser, the chancellor and CEO of Keiser University in Florida, told the Washington Examiner in an interview that the university, which is owned by the parent organization Everglades College Inc., has suffered reputational harm after being listed on the settlement.
"Two months after that order issued — and more than seven months after the settlement ... [was] made public — movants’ assertions of reputational harm remain markedly speculative, [and] 'grounded in platitudes rather than evidence,'" Alsup wrote. Despite Alsup's ruling rejecting a stay on discharging loans, Nicholas Kent, the chief policy officer for Career Education Colleges and Universities, told the Washington Examiner that he expects the judge's ruling to be appealed to the 9th U.S. Circuit Court of Appeals and ultimately be overturned.
Keiser theorized that the Education Department and the Biden administration were disregarding the concerns of the colleges because they were trying to use the legal settlement as a backdoor to student loan forgiveness. Last year, the administration announced plans to forgive up to $20,000 in federally held student loans for borrowers making less than $125,000. The legality of the plan now awaits a ruling from the Supreme Court.
"The settlement is about providing long-awaited relief to more than 200,000 borrowers and resolving the plaintiff’s claims in a fair and equitable manner," the department spokesperson said.
Biden has extended the student loan repayment pause for the eighth time, which could last until August 2023. Every time it is extended it worsens the inflation outlook. In late 2021, it was unnecessary, at this point it's downright economically damaging.
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