FEDERAL POLICY AND LEGISLATIVE UPDATE
April 30, 2024
This update is a summary of the detailed information provided during CECU’s April 30 webinar (available to CECU members here), the first in a new series of regular recurring members-only webinars in which CECU’s advocates will discuss the latest legislative, regulatory, and legal updates. These recent policy developments across all three branches of the federal government will have a direct impact on campus operations and compliance at postsecondary proprietary schools.
LEGAL UPDATE
Borrower Defense to Repayment
CCST v. Cardona – The Fifth Circuit Court of Appeals ruled against the Department of Education (Department) and continued the nationwide injunction against the implementation of the Biden administration’s Borrower Defense to Repayment (BDR) Rule, sending the case back to the District Court in the Western District of Texas for consideration of the merits. The Fifth Circuit provided extensive discussion supporting its conclusion that the Biden Rule is “almost certainly unlawful,” which will provide a strong basis for the lower court to rule against the Biden administration. CECU provides alerts and an analysis of progress in the case on this page.
While the Biden BDR Rule is prevented from going into effect, the prior version of the Rule is still in effect and schools will continue to receive BDR claims from the Department which are being processed under the Sweet v. Cardona settlement. CECU recommends responding to all claims received from the Department as it remains unclear how aggressive the Department will be in recouping forgiven debt from institutions.
