United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED April 4, 2024 No. 23-50491 Lyle W. Cayce ____________ Clerk Career Colleges and Schools of Texas,

Plaintiff—Appellant,

versus United States Department of Education; Miguel Cardona, Secretary, U.S. Department of Education, in his official capacity as the Secretary of Education,

Defendants—Appellees. ______________________________

Appeal from the United States District Court for the Western District of Texas USDC No. 1:23-CV-433 ______________________________ Before Jones, Duncan, and Wilson, Circuit Judges. Edith H. Jones, Circuit Judge: An association of Texas career colleges and schools challenges the Department of Education’s new regulations that will significantly facilitate certain student loan discharges while creating uncertainty, complexity and potentially huge liability for the association’s members. The Rule overturns recent regulations issued by the previous Administration and upends thirty years of regulatory practice. The district court declined to issue a preliminary injunction against the Rule solely on the basis that the plaintiffs had not Case: 23-50491 Document: 86-1 Page: 2 Date Filed: 04/04/2024

No. 23-50491

shown irreparable harm. Not only do we disagree with that finding, but we assess a strong likelihood that the plaintiffs will succeed on the merits in demonstrating the Rule’s numerous statutory and regulatory shortcomings.1 Therefore, we REVERSE the district court’s order denying a preliminary injunction and REMAND with instructions to enjoin and postpone the effective date of the challenged provisions pending final judgment. Our stay pending appeal remains in effect until the district court imposes a preliminary injunction consistent herewith. I. Background A. The 2022 Rule On November 1, 2022, the Department promulgated a final rule that revamped various aspects of the federal student loan program, including provisions governing student loan discharges based on the acts, omissions, or closures of higher education institutions. See Institutional Eligibility Under the Higher Education Act of 1965, 87 Fed. Reg. 65,904 (Nov. 1., 2022) (final rule) (“Rule”). Appellant Career Colleges and Schools of Texas (“CCST”), an association of private postsecondary career schools in Texas, sued the Department and Secretary Miguel Cardona, challenging various _____________________ 1 It is not this court’s prerogative to assess regulatory motives. Compare Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 268 n.18, 97 S. Ct. 555, 565 n.18(1977)(judicial inquiries into legislative or executive motives are ordinarily disfavored) with Dep’t of Com. v. New York, 588 U.S.___, 139 S. Ct. 2551, 2575–76 (2019)(concluding that there was a “disconnect between the decision made and the explanation given” because the agency’s purported reasoning “was more of a distraction” and pretextual). But given the manifest legal shortcomings of the challenged portions of this Rule, it seems to be of a piece with the Executive Branch’s larger goal to sidestep, to the greatest extent possible, the Supreme Court decision holding Presidential student loan discharges ille