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Federal court strikes down Biden’s student loan forgiveness program

Federal court strikes down Biden’s student loan forgiveness program


Washington
CNN

A federal judge in Texas has thrown out President Joe Biden student loan forgiveness programdeclaring it illegal.

The lawsuit was filed in October by a conservative group, the Job Creators Network Foundation on behalf of the two borrowers who did not qualify for debt relief.

Biden’s program was already on hold due to a separate legal challenge.

The Biden administration argued that Congress gave the education secretary authority to broadly pay off student loan debt in a 2003 law known as the HEROES Act.

However, a federal judge in Texas found that the law did not give the executive branch clear authority from Congress to create a student loan forgiveness program.

“The program is therefore an unconstitutional exercise of Congress’ legislative power and must be struck down,” wrote Judge Mark Pittman, who was nominated by then-President Donald Trump.

“In this country we are not ruled by an all-powerful executive with a pen and a phone,” he continued.

The Justice Department said Thursday it would appeal the decision, and White House press secretary Karine Jean-Pierre said in a statement that “we strongly disagree with the District Court’s ruling on our student debt relief program.”

“For 26 million borrowers who have already provided the Department of Education with the necessary information to be considered for debt relief – of which 16 million have already been approved for debt relief – the Department will retain their information so that it can quickly process their release once we win in court,” he said. Jean-Pierre.

The Biden administration has been barred from writing off any debt since the 8th U.S. Circuit Court of Appeals ruled administrative detention on the program on October 21.

The appeals court has yet to rule on the lawsuit, which was brought by six republic-led states. A lower court judge dismissed suit on October 20, ruling that the states lacked legal standing to file a challenge.

The Biden administration faces several other legal challenges to the program. Supreme Court Justice Amy Coney Barrett has rejected two separate requests to challenge the program.

Under Biden’s program, individual borrowers who earned less than $125,000 in 2020 or 2021 and married couples or heads of households who earned less than $250,000 a year in those years are eligible to have up to $10,000 of their federal student loan debt forgiven.

If a qualified borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 in debt forgiveness.

In the case decided Thursday, one plaintiff did not qualify for the student loan forgiveness program because her loans are not held by the federal government, and the other plaintiff is only eligible for $10,000 in debt relief because she did not receive a Pell grant.

They claimed that they could not express their disagreement with the rules of the program because the administration had not put it through the formal process of making rules on notice and comment under the Administrative Procedure Act.

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

The advocacy group was founded by Bernie Marcus, big Trump donor and former CEO of Home Depot.

Federal student loan payments have been paused since March 2020 for pandemic benefits. They are scheduled to resume in January.

This story has been updated with additional information.



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