Biden eliminates student debt, we analyze it with an expert 3:02

(CNN) -- Some of President Joe Biden's student loan policies continue to face legal challenges.

While the Supreme Court blocked the president's main student loan forgiveness program in early June, the administration is also grappling with lawsuits over some of its other policy changes aimed at making it easier for borrowers to repay their loans.

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On Monday, the 5th U.S. Circuit Court of Appeals temporarily blocked new provisions that were due to take effect in July that would make it easier for borrowers to cancel their debts if they are cheated or defrauded by the university, under a rule known as the borrower's defense against payment.

This rule has been in force for decades. But the lawsuit concerns new provisions, including one that allows automatic debt cancellation one year after a university's closing date and another that prohibits universities from requiring borrowers to agree to mandatory arbitration, which are now blocked.

The request for an urgent injunction was filed by Career Colleges and Schools of Texas, a group of commercial colleges. The appeals court's order did not explain the reasoning for the decision, but said the case would be heard on Nov. 6.

Student loan borrowers can still file applications for debt relief under the borrower defense rule during this time, but the Department of Education "will not adjudicate or process affected applications under the new rule while the court order is in effect," according to the agency's website.


Aaron Ament, president of the nonprofit National Student Legal Defense Network, warned that "countless students risk being taken advantage of by higher education speculators" until protections are restored.

Another lawsuit challenges student debt forgiveness

Meanwhile, in another lawsuit filed last week, two conservative groups sought to block the Biden administration from making a one-off adjustment to the accounts of some borrowers aimed at more accurately accounting for payments previously made under an income-based amortization plan.

These plans calculate payments based on the borrower's income and family size, regardless of the person's total outstanding debt. They typically reduce monthly payments to help borrowers avoid defaulting on their loans and eliminate remaining balances after making necessary payments for 20 to 25 years.

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According to the Department of Education, what the administration has dubbed "fixes" is expected to result in the cancellation of $39 billion worth of federal student loan debt for 000,804 borrowers.

The lawsuit, filed by the New Civil Liberties Alliance on behalf of the conservative groups Cato Institute and Mackinac Center for Public Policy, argues that the one-time adjustment "is substantially and procedurally illegal," similar, it says, to the broader student loan forgiveness program struck down by the Supreme Court.

The Department of Education announced in July, weeks after the other forgiveness program was blocked, that it would begin notifying all 804,000 borrowers of their upcoming debt cancellation.

But the one-off adjustment had been planned for more than a year. First announced in April 2022, the measure was meant to help borrowers whose payments had been misaccounted for and were already eligible for debt relief under an income-based repayment plan.

The changes came in the wake of a report by the government's Office of Accountability that revealed the Department of Education was struggling to track borrowers' payments and had not done enough to ensure that all eligible borrowers received the forgiveness to which they were entitled. In fact, 7,700 loans in repayment, or about 11% of the loans analyzed, could have already been potentially eligible for forgiveness.

In a statement sent to CNN, the Department of Education said the lawsuit "is nothing more than a desperate attempt by right-wing special interests to keep hundreds of thousands of borrowers in debt, even though these borrowers have earned the forgiveness promised through income-based repayment plans."

This latest legal challenge does not appear to immediately affect the government's new revenue-based rebate plan, known as SAVE (Saving on a Valuable Education), which was launched last week.

Once the SAVE plan is fully implemented, which is expected to happen next year, some borrowers could see their monthly bills cut in half and the remaining debt paid off after making at least 10 years of payments.

-- CNN's DJ Judd contributed to this report.

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