Biden’s Student Debt Cancellation Plan Overturned by a Texas Judge: NPR

A U.S. judge in Texas on Thursday blocked President Joe Biden’s plan to provide millions of borrowers with up to $20,000 each in federal student loan forgiveness — a program that was already on hold as a court ruled. Federal appeal to St. Louis is considering a separate lawsuit by six contesting states.

District Court Judge Mark Pittman, appointed by former Fort Worth-based President Donald Trump, said the program usurps the power of Congress to make laws.

“In this country, we are not governed by an all-powerful executive with a pen and a telephone. Instead, we are governed by a Constitution which provides for three separate and independent branches of government,” Pittman wrote.

He added: “The Court is not blind to the current political division in our country. But it is fundamental to the survival of our Republic that the separation of powers as set forth in our Constitution be preserved.”

The debt cancellation plan would cancel $10,000 of student loan debt for those earning less than $125,000 or households with incomes less than $250,000. Pell Grant recipients, who typically demonstrate greater financial need, would get an additional $10,000 in debt forgiveness.

Forgiveness applies to federal student loans used to attend undergraduate and graduate school, as well as Parent Plus loans.

The 8th US Circuit Court of Appeals suspended the pardon plan on October 21 as it considered an effort by the states of Nebraska, Missouri, Iowa, Kansas, Arkansas and North Carolina. South to block the program.

While the stay temporarily prevented the administration from actually writing off the debt, the White House encouraged borrowers to continue seeking relief, saying the court order did not prevent applications or the review of applications. . By the end of October, more than 22 million borrowers had applied for debt relief.

Legal challenges have sown confusion over whether borrowers who expected to have their debt forgiven will have to resume payments on Jan. 1, when a pause caused by the COVID-19 pandemic is set to expire.

Economists worry that many people have yet to bounce back financially from the pandemic, saying that if borrowers who expected debt cancellation were asked to make payments instead, many could fall behind on bills and default.

The White House did not immediately respond to the decision.
In his order Thursday, Pittman said the Higher Education Student Aid Opportunities Act of 2003, commonly known as the HEROES Act, did not provide authorization for the loan forgiveness program that the Biden administration claimed to have.

The act allows the Secretary of Education to “waive or vary any statutory or regulatory provision applicable to student financial aid programs … which the Secretary deems necessary in connection with a war or other military operation or a national emergency”.

The administration argued that student loan relief was thus authorized as a means of dealing with the national emergency of the pandemic. Pittman disagreed, believing that a program of such massive importance required clear authorization from Congress. The HEROES Act “does not give the executive branch clear authorization from Congress to create a $400 billion student loan forgiveness program,” he wrote.

Pittman also rejected government arguments that the plaintiffs who filed the lawsuit lacked standing. Plaintiffs Myra Brown and Alexander Taylor both have student loans, but Brown is not eligible for debt relief because her loans are held by businesses, and Taylor is not eligible for the full 20 $000 because he didn’t receive a Pell grant.

The administration said it was not harmed by the loan forgiveness program and that its “displeasure that some other borrowers were receiving a greater benefit than them” did not give rise to a lawsuit.

Pittman said they were aggrieved, however, because the government did not take public comment on the program’s eligibility requirements, meaning they had no chance to provide comment on a program from which they would be at least partially excluded.

Predictably, reaction to the decision was mixed along political fault lines. The Student Borrower Protection Center blasted Pittman as a “right-wing federal judge,” saying “tens of millions of student borrowers across the country now have their vital debt relief blocked as a result of this outlandish legal claim and made”.

Representative Virginia Foxx of North Carolina, the most Republican on the House Education Committee, celebrated it.

“Yet another nail has been added to the coffin of President Biden’s illegal student loan bailout, and hard-working taxpayers across the country are rightly rejoicing,” she said. “This administration continues to operate as if its own self-proclaimed authority in transferring billions of dollars in student loans is legitimate, yet the rule of law says otherwise.”