December 9, 2022

US judge rejects Biden’s student loan relief plan

Nov 10 (Reuters) – President Joe Biden’s plan to cancel hundreds of billions of dollars in student loan debt is illegal and should be vacated, a federal judge in Texas ruled on Thursday, handing a victory to the plan’s conservative opponents.

U.S. District Judge Mark Pittman, a Republican appointee of former President Donald Trump in Fort Worth, called the plan an “unconstitutional exercise of Congress’ legislative power” as he ruled in favor of the two borrowers backed by a conservative advocacy group.

The debt relief plan has already been temporarily blocked by the St. Louis-based 8th US Circuit Court of Appeals while six Republican-led states consider a request to implement it while they appeal their own case to be dismissed.

The judge’s ruling came in a lawsuit filed by two borrowers who did not qualify partially or fully for Biden’s loan forgiveness program. Plaintiffs argued that it did not follow proper rulemaking processes and was illegal.

The borrowers were supported by the Job Creators Network Foundation (HD.N).

The US Department of Justice immediately appealed the ruling. White House spokeswoman Karine Jean-Pierre said in a statement that the administration strongly disagrees with the decision.

About 26 million Americans have applied for student loan forgiveness, and the U.S. Department of Education has already approved the requests of 16 million. Jean-Pierre said the department will hold on to their information “so it can quickly process their relief once we win in court.”

“We will never stop fighting for the hard-working Americans who need it most — no matter how many roadblocks our enemies and special interests try to put in our way,” he said.

Biden’s plan has been the subject of several lawsuits by conservative state attorneys general and legal groups, but plaintiffs before Thursday struggled to convince the courts that they would continue to sue.

The plan, announced in August, calls for forgiveness of up to $10,000 of student loan debt for borrowers making less than $125,000 a year, or $250,000 for married couples. Borrowers who receive Pell Grants to benefit low-income college students will have up to $20,000 in loan cancellation.

The nonpartisan Congressional Budget Office estimated in September that debt relief would eliminate about $430 billion of the $1.6 trillion in outstanding debt relief and that more than 40 million people would be eligible to benefit.

His 26 page judgmentPittman said Biden’s plan is irrelevant if it is good public policy because the plan is “one of the largest exercises of legislative power without congressional authority in the history of the United States.”

Pittman did not approve the Heroes Act — the law providing loan assistance to military veterans and the relief program relied on by the Biden administration — to authorize a $400 billion student loan forgiveness program.

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

Elaine Parker, president of the Job Creators Network Foundation, said in a statement that the ruling “protects the rule of law, which requires all Americans to have their voices heard by their federal government.”

Reporting by Nate Raymond in Boston; Editing by Sandra Maller, Rosalba O’Brien and Kenneth Maxwell

Our Standards: Thomson Reuters Trust Principles.