- A U.S. judge in Texas on Thursday blocked President Joe Biden’s plan to provide millions of borrowers with up to $20,000
- The debt forgiveness plan would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income
- Rep. Virginia Foxx of North Carolina, the ranking Republican on the House education committee, celebrated it.
Thursday, a federal judge in Texas stopped President Joe Biden’s plan to award up to $20,000 in federal student-loan forgiveness to millions of borrowers. This scheme was already on pause until a federal appeals court in St. Louis hears a second complaint filed by six states contesting it.
Former President Donald Trump’s appointee, Fort Worth-based District Court Judge Mark Pittman, stated that the program usurped the authority of Congress to establish laws.
Pittman wrote, “In this country, we are not ruled by an all-powerful presidency with a pen and a phone, but by a Constitution that establishes three separate and independent departments of government.”
The separation of powers as defined in our Constitution is crucial to the survival of our republic, he added.
The plan would waive $10,000 in student loan debt for individuals earning less than $125,000 or households earning less than $250,000 annually. Pell Grant recipients, who demonstrate greater financial need on average, would receive an additional $10,000 in debt relief.
The cancellation is applicable to federal student loans used for undergraduate and graduate education, as well as Parent Plus loans.
Eighth U.S. The Circuit Court of Appeals put the plan on hold on October 21 as it evaluated a move by Nebraska, Missouri, Iowa, Kansas, Arkansas, and South Carolina to halt the program.
While the stay temporarily prevented the administration from actually clearing debt, the White House encouraged debtors to continue applying for debt relief, stating that the court decision did not preclude applications or application reviews. More than 22 million borrowers had sought for debt relief as of late October.
As a result of the legal challenges, it is unclear whether debtors who anticipated debt cancellation will be required to resume making payments on January 1, when the moratorium prompted by the COVID-19 pandemic will end.
Economists are concerned that many individuals have yet to recover financially from the pandemic, stating that if debtors who were anticipating debt cancellation are required to make payments instead, many may fall behind on their debts and default.
The White House did not respond immediately to the decision.
Thursday, Pittman issued an order stating that the Higher Education Relief Opportunities for Students Act of 2003, often known as the HEROES Act, did not authorize the loan forgiveness program as stated by the Biden administration.
The statute permits the secretary of education to “waive or amend any statutory or regulatory restriction relevant to the student financial assistance programs… as necessary in connection with a war or other military operation or national emergency.”
The administration maintained that the student loan forgiveness was allowed in response to the epidemic as a national emergency. Pittman dissented, arguing that a program with such vast implications required explicit congressional authorization. The HEROES Act “does not clearly authorize the executive branch to establish a $400 billion student loan forgiveness scheme,” he said.
Pittman also dismissed the government’s claims that the plaintiffs lacked standing to file the complaint. Myra Brown and Alexander Taylor both have student loans, but Brown is not eligible for debt relief because her debts are owned by a commercial lender, and Taylor is not eligible for the entire $20,000 because he did not earn a Pell grant.
The administration stated that they were not injured by the loan forgiveness program and that their “displeasure that other borrowers are obtaining a bigger benefit than they are” did not grant them the right to file a lawsuit.
Pittman stated, however, that they were damaged since the government would not accept public comment on eligibility standards for the program, so denying them the opportunity to provide opinion on a program from which they would be at least partially barred.
Predictably, there were differing reactions to the decision along political fault lines. The Student Borrower Protection Center slammed Pittman as a “right-wing federal judge,” stating that “tens of millions of student loan borrowers throughout the nation have their crucial debt relief blocked as a result of this ludicrous and contrived legal argument.”
It was celebrated by Rep. Virginia Foxx of North Carolina, the ranking Republican on the House education committee.
She stated, “Another nail has been hammered into the coffin of President Biden’s illegal student loan bailout, and hardworking taxpayers around the nation are applauding.” “This administration continues to act as if its self-appointed authority to move billions of dollars in student loans is lawful, despite the fact that the rule of law dictates otherwise.”