Career Colleges & Schools of Texas v. U.S. Department of Education

Under the Higher Education Act, student loan borrowers who can show that the school they attended engaged in certain wrongful acts or omissions have a defense against repayment of their federal student loan debt through a process known as “borrower defense” to repayment. The borrower defense process is particularly important in light of revelations that some for-profit colleges and universities have misled and deceived vulnerable students, persuading, sometimes coercing, them to take out federal student loans to attend programs that provided minimal educational value.

In November 2022, the Department of Education finalized its rule implementing the borrower defense statute. Five months later, in April 2023, Career Colleges & Schools of Texas (CCST) filed a lawsuit challenging the rule and moved for a preliminary injunction against implementation of the rule. Public Citizen and the Project on Predatory Student Lending at Harvard Law School moved for leave to file a brief as amici curiae in support of the Department. The proposed brief provided important history and context for the challenged 2022 Borrower Defense Rule by explaining that many of the provisions challenged by CCST reflect the Department of Education’s consistent interpretation of the borrower defense statute, 20 U.S.C. § 1087e(h), over nearly three decades. The brief also explained that the plain meaning of the statutory text supports the availability of borrower defense relief based on affirmative claims. CCST opposed our motion for leave to file the brief, however, and the court denied our motion.