Four student loan legal cases as federal interest rates resume.
Interest rates on federal student loans resume after pandemic pause
After a three-and-a-half-year pause due to the COVID-19 pandemic, interest rates on federal student loans have begun again. Borrowers will have their first payment due in October. During the pause, there have been several court cases regarding student loan relief and allocation.
President Biden wipes out $72 million in student loan debt
In a victory for President Joe Biden, his administration has eliminated $72 million in student loan debt for 2,300 borrowers. This comes after the Supreme Court struck down his broader debt relief plan.
Court cases and settlements involving student loan forgiveness
Here are some recent court cases and settlements related to student loan forgiveness:
Biden v. Nebraska
Six Republican-led states filed a lawsuit against Biden’s plan to eliminate $20,000 in student debt. They argued that Biden overstepped his authority by canceling debt without authorization from Congress. The Supreme Court ruled against Biden, stating that clear congressional authorization was needed.
Department of Education v. Brown
Two plaintiffs sued the Department of Education over Biden’s loan forgiveness plan, claiming they were excluded from the plan. The Supreme Court ruled in favor of Biden, stating that the plaintiffs lacked legal standing to bring a lawsuit.
Education Department settlements with five law schools
The Department of Education reached a $2.9 million settlement with five law schools for improperly distributing federal student loans to students in their advanced law degree programs. The schools involved are Albany Law School, John Marshall Law School, Brooklyn Law School, New England Law-Boston, and New York Law School.
FTC and DOJ settlement worth $9 million
The Federal Trade Commission and the Justice Department announced a $9 million refund to student loan borrowers who were deceived by a debt relief scheme operated by Brandon Frere. The refunds will be sent to over 22,000 consumers.
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