A federal judge just struck down Biden's student-loan forgiveness plan — the most serious legal setback for the debt relief so far
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- A federal judge in Texas struck down Biden's student-loan forgiveness on Thursday.
- It's in response to a lawsuit filed by two student-loan borrowers who didn't qualify for the relief.
- This is the most serious legal setback to Biden's debt relief so far.
A federal judge just became the first to strike down President Joe Biden's student-loan forgiveness plan.
On Thursday, US District Judge Mark Pittman — appointed by former President Donald Trump — in the Northern District of Texas Court ruled that Biden's plan to forgive up to $20,000 in student debt for federal borrowers making under $125,000 a year is illegal.
This was in response to a lawsuit filed by two student-loan borrowers, Myra Brown and Alexander Taylor, represented by conservative group the Job Creators Network, who sued because they were left out of debt relief. One of them didn't qualify for the full $20,000 because he didn't receive a Pell Grant, and the other didn't qualify because she had commercially-held loans.
They claimed that issuing broad student-loan forgiveness without going through the typical rulemaking process violated the Administrative Procedure Act's notice-and-comment procedure, which requires an unelected administrator to justify rulemaking to the public.
This ruling is the first of its kind so far amid at least five other major conservative lawsuits that are also attempting to block student-loan forgiveness. The Education Department will likely appeal this decision.
"The court has correctly ruled in favor of our motion and deemed the Biden student loan program illegal," Elaine Parker, president of the Job Creators Network Foundation, said in a statement. "The judge criticized the Biden Administration program, calling it 'one of the largest exercises of legislative power without congressional authority in the history of the United States.' This ruling protects the rule of law which requires all Americans to have their voices heard by their federal government."
It also comes as the 8th Circuit Court of Appeals already placed a temporary stay on the debt relief until it makes a final decision on its legality, in response to a different lawsuit filed by six Republican-led states which argued debt relief would hurt their states' tax revenues.
The department has maintained it has the authority to cancel student debt under the HEROES Act of 2003, which gives the Education Secretary the ability to waive or modify student-loan balances in connection with a national emergency, like COVID-19. But as Pittman wrote in his ruling, "no one can plausibly deny that it is either one of the largest delegations of legislative power to the executive branch, or one of the largest exercises of legislative power without congressional authority in the history of the United States."
"And having interpreted the HEROES Act, the Court holds that it does not provide 'clear congressional authorization' for the Program proposed by the Secretary," he wrote.
The Justice Department had previously pushed back on the plaintiff's claims, arguing that the HEROES Act doesn't require notice and comment.
"The Secretary's action under the HEROES Act is grounded in an analysis of the economic effects of the national emergency and is tailored to recovery from it," the Justice Department wrote in a court filing. "Because that decision fits comfortably within his HEROES Act authority, any substantive challenge to the program bootstrapped to Plaintiffs' procedural claim is not likely to succeed on the merits."
Biden recently said that 26 million borrowers have already applied for debt relief, and as of last week, the Education Department had approved 16 million of them to have their loans discharged. It has not not yet commented on whether it will extend the student-loan payment pause amid these lawsuits, which is currently set to expire after December 31.
"Today, a federal judge conspired with right-wing politicians and corrupt corporations to block life-changing student debt relief for tens of millions of families," executive director of advocacy group Student Borrower Protection Center Mike Pierce said in a statement.
"In courts across the country, dark money-backed legal challenges are growing like weeds," he added. "The Biden Administration must use this decision as an opportunity to make it clear that the student loan system will remain shut off as long as these partisan legal challenges persist. Student loan borrowers should never be sacrificed as pawns in Republicans' political games."
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