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Texas judge overturns Biden’s student loan forgiveness

Texas judge overturns Biden’s student loan forgiveness

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A federal judge in Texas struck down President Biden on Thursday student loan forgiveness programhanding a victory to a conservative advocacy group that sued to overturn the plan.

Job Creators Network Foundation filed a lawsuit in October on behalf of a borrower who does not qualify for the full $20,000 in debt relief and a borrower who is in full default. The lawsuit alleges the administration violated federal procedures by denying borrowers the opportunity to provide public comment before disclosing the program.

U.S. District Judge Mark T. Pittman, a Donald Trump appointee, declared the policy illegal in Thursday’s decision.

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

The Biden administration did not immediately comment on the decision, but officials previously said they would fight any order blocking the plan.

Pittman’s order comes after the U.S. Court of Appeals for the 8th Circuit last month granted a stay against the loan forgiveness program in a special lawsuit passed by six Republican-led states. The cases are among a growing number of legal challenges to stop Biden’s program. Some of those lawsuits, including one filed in Indiana and another in Wisconsin, have been dismissed for lack of standing, but others are pending.

There were Republican attorneys general, top lawmakers and conservative groups discuss legal options to scrap Biden’s plan, which they say represents an illegal overreach of executive power since he announced it in August. A week after Biden unveiled the policy, the president of the Job Creators Network — founded by Bernie Marcus, a GOP donor who co-founder of Home Depot – told Fox News that the group is building a legal team and working with outside counsel to prepare the lawsuit.

In the Texas case, plaintiffs alleged, in part, that the Biden administration made arbitrary decisions about who would qualify for debt forgiveness and how much would be canceled. Biden’s loan relief plan would eliminate up to $10,000 of federal student debt for borrowers making up to $125,000 a year or up to $250,000 a year for married couples. Borrowers who received Pell Grants they are eligible for an additional $10,000 in forgiveness.

Alexander Taylor, one of the plaintiffs in the case, falls below the income threshold and is entitled to have $10,000 deducted from the $35,000 in student loans he has for undergraduate studies at the University of Dallas, the lawsuit alleges. Yet because he never got a Pell Granta form of federal aid for low-income students, he does not qualify for the additional $10,000 given to Pell recipients.

Myra Brown, the other plaintiff in the suit, is ineligible for Biden’s plan because her federal loans, made through the defunct Federal Family Education Loan (FFEL) program, are held by private individuals. By the end of last month, commercial FFEL borrowers as Brown could consolidate his loans into a Direct Loan to qualify for the Biden plan. But the Department of Education reversed the policy to prevent legal challenges like the one launched by six states.

The decision left Brown, who owes $17,000 in student loans for graduate school at Southern Methodist University in Dallas, without access to the program.

U court filing Responding to the lawsuit, the Justice Department argued that the 2003 statute underpinning Biden’s plan does not require notice and comment. That law, known as the Heroes Act, authorizes the secretary of education “to alleviate hardships that federal student loan recipients may suffer as a result of national emergencies.”

Justice attorneys argue that the program’s parameters are based on research showing that the risk of delinquency and default is acute among lower-income borrowers and Pell recipients. They said Brown and Taylor were not eligible for any loan forgiveness and that their complaints did not constitute a specific violation.

Pittman disputed the use of the Heroes Act, saying “it does not provide clear congressional authorization for the program proposed by the Secretary.”

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

Student attorneys were concerned about the outcome of the lawsuit after Pittman recently told the parties that he planned to decide the case on the merits, rather than determine whether the borrowers could file a lawsuit at all.

“That meant he never really considered the standing arguments the government made, never bothered to establish a record based on real facts, but instead issued a poorly reasoned ideological basis for an opinion,” Mike Pierce, executive director of the Center for Defense of student borrowers, the advocacy group, said Thursday.

This is a developing story.



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