A US judge has struck down Biden’s plan to reduce student debt

A US judge has struck down Biden’s plan to reduce student debt

A US judge has struck down Biden’s plan to reduce student debt

Nov 10 (Reuters) – A federal judge in Texas ruled on Thursday that President Joe Biden’s plan to write off hundreds of billions of dollars in student loan debt is illegal and must be overturned, handing a victory to conservative opponents of the program.

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

The debt repayment plan had already been temporarily blocked by the 8th US Circuit Court of Appeals in St. Louis. Louis as he considers the request six Republican-led states to order it while they were appealing the dismissal of their own suit.

The judge’s ruling followed a lawsuit by two borrowers who were partially or completely ineligible for the loan forgiveness offered by the Biden plan. Prosecutors argued that it did not follow proper rulemaking processes and was illegal.

The borrowers were backed by the Job Creators Network Foundation, a conservative advocacy group founded by Home Depot co-founder Bernie Marcus (HD.N).

The US Department of Justice immediately launched an appeal against the verdict. White House press secretary 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 US Department of Education has already approved 16 million applications. Jean-Pierre said the department will retain their information “so that it can quickly process their assistance when we win in court.”

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

Biden’s plan has been the subject of several lawsuits by conservative attorneys general and legal groups, but the plaintiffs struggled before Thursday to convince courts that they were harmed in such a way that they have standing to sue.

The plan, announced in August, calls for forgiveness of up to $10,000 in student loan debt for borrowers earning less than $125,000 a year, or $250,000 for married couples. Borrowers who received Pell grants for low-income students will have up to $20,000 of their debt written off.

The nonpartisan Congressional Budget Office calculated in September that debt relief would be eliminate about $430 billion of the $1.6 trillion in outstanding student debt and that more than 40 million people were eligible for benefits.

In his Judgment on 26 pagesPittman said whether Biden’s plan is good public policy is irrelevant because the program is “one of the largest exercises of legislative power without congressional authority in the history of the United States.”

Pittman wrote that the HEROES Act — the law that provides loan assistance to military personnel and that the Biden administration relied on to pass the aid plan — did not authorize the $400 billion student loan forgiveness program.

“In this country we are not ruled by an all-powerful executive branch 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 that requires all Americans to have their voices heard by their federal government.”

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

Our standards: Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on federal justice and litigation. He can be reached at [email protected]

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