A few weeks ago, I shared that the Department of Education had planned to, for the first time since 2020, resume wage garnishments and other involuntary collections on federal student loans. Today, though, the Department announced a reversal of course, stating it would delay collections efforts while it “implement[s] major student loan repayment reforms under the Working Families Tax Cuts Act.” It is unclear what one has to do with the other, or what has changed in the last month. The Department’s announcement doesn’t shed any light on that, with Under Secretary of Education Nicholas Kent stating that “the Biden Administration misled borrowers into believing their student loans would not need to be repaid.”
It’s unclear what “misleading” behavior the Department is referring to–surely, its not misleading to enact a program only for a state to get the program set aside on a questionable statutory interpretation theory (with a strained standing theory). Its particularly odd for Under Secretary Kent to use the word “misleading,” given his career advocating for for-profit schools- an industry that, in rulemaking proceedings around the statutory borrower defense to repayment, has consistently sought to narrowly define the word “misleading” and to require intent as part of the definition.
