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A federal judge will rule today on how to address an improper decision by Education Secretary Betsy DeVos to freeze a plan to help student loan borrowers who were cheated by their schools, the New York Times reported. A new Education Department rule would have sped up and expanded a system for erasing the federal loan debts of students at schools that broke state laws and misled their attendees. It may now be revived: Judge Randolph D. Moss, a federal judge in Washington, D.C., said on Wednesday that the department’s move to postpone the rule just weeks before its start date last year was “arbitrary and capricious.” The ruling was a victory for attorneys general from 18 states and the District of Columbia, who filed a lawsuit last year challenging the Education Department’s decision. Judge Moss’s decision may lead to changes in how the government handles tens of thousands of existing claims from students seeking to have their loans discharged. But any remedies he orders may soon be blunted: The Education Department is working to completely revise its system for handling future requests.

Federal Reserve figures released yesterday showed that consumer borrowing picked up in July, MarketWatch.com reported. Total consumer credit rose $16.6 billion in July to a seasonally adjusted $3.91 trillion. That’s an annual growth rate of 5.1 percent. Revolving credit, such as credit cards, rose only slightly in July. Borrowing on credit cards rose by 1.5 percent, reversing a 1.4 percent drop in June. Nonrevolving credit, typically auto and student loans, jumped 6.4 percent in July after a 4 percent gain in the prior month. That is the largest increase in eight months. The report does not include mortgage debt.

The Consumer Financial Protection Bureau faced a legal challenge at the Supreme Court on Thursday to its singe-director format, the Washington Times reported. State National Bank of Big Spring, Texas, along with the nonprofit Competitive Enterprise Institute and the seniors’ advocacy group 60 Plus Association, filed a petition with the high court to hear a lawsuit that seeks to declare the CFPB’s organizational structure unconstitutional. The agency was created in 2010 as part of the Dodd-Frank financial regulatory law. The petition from CEI notes that the bureau has a single director that the president cannot remove from office for policy reasons, that Congress has no control over or oversight of CFPB funding, and that the bureau lacks internal checks or balances of a multimember commission.

The federal official in charge of protecting student borrowers from predatory lending practices has stepped down, NPR.org reported. In a scathing resignation letter, Seth Frotman, who until now was the student loan ombudsman at the Consumer Financial Protection Bureau, says that current leadership "has turned its back on young people and their financial futures." The letter was addressed to Mick Mulvaney, the bureau's acting director. In the letter, Frotman accuses Mulvaney and the Trump administration of undermining the CFPB and its ability to protect student borrowers. The letter raises serious questions about the federal government's willingness to oversee the $1.5 trillion student loan industry and to protect student borrowers. Frotman has served as student loan ombudsman for the past three years. Congress created the position in 2010, in the wake of the financial crisis, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As ombudsman and assistant director, Frotman oversaw the CFPB's Office for Students and Young Consumers and reviewed thousands of complaints from student borrowers about the questionable practices of private lenders, loan servicers and debt collectors.

Lenders are stepping up offers of personal loans, many to consumers with poor credit histories, promising to fund home renovations, vacations and debt repayments for a group of borrowers they all but ignored in the years after the financial crisis, the Wall Street Journal reported. American Express Co., Goldman Sachs Group Inc., LendingClub Corp. LC and Social Finance Inc. are among those behind an onslaught of unsolicited mailings offering unsecured loans as large as $100,000. In the first half of this year, lenders mailed a record 1.26 billion solicitations for these loans, according to market-research firm Competiscan. The second quarter marked the first period that lenders mailed out more offers for personal loans than credit cards, a much bigger market, according to research firm Mintel Comperemedia. While the market for personal loans is relatively small, it is growing quickly. Lenders extended $81.9 billion in personal loans to U.S. consumers in the first half of the year, up about 13 percent from a year prior, according to credit-reporting firm Experian PLC. That compares with a 9 percent rise in auto loans and leases and a 5 percent boost in spending limits issued on new general-purpose credit cards over the same period.