US judge in Texas scraps Biden’s loan forgiveness plan

The judge said the program usurped the power of Congress to legislate.

(Evan Vucci | AP) President Joe Biden speaks on student loan debt relief Friday, October 21, 2022, at Delaware State University in Dover, Delaware. A US judge in Texas on Thursday, November 9, 2022 blocked Biden’s plan to forgive millions of borrowers up to $20,000 each on federal student loans.

A U.S. judge in Texas on Thursday blocked President Joe Biden’s plan to grant millions of borrowers up to $20,000 a piece in federal student loan forgiveness — a program that was already suspended because a federal appeals court in St. Louis ruled on a separate lawsuit contemplates six states challenging him.

District Court Judge Mark Pittman, an appointee to former President Donald Trump based in Fort Worth, said the program usurped the power of Congress to legislate.

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

He added: “The Court is not blind to the current political divisions in our country. But it is fundamental to the survival of our republic that the separation of powers as enshrined in our constitution is preserved.”

The debt relief plan would eliminate $10,000 in student loan debt for those earning less than $125,000 or households earning less than $250,000. Pell Grant recipients, who typically have higher financial needs, would receive an additional $10,000 in debt relief.

The termination applies to federal student loans used to attend elementary and high schools, as well as Parent Plus loans.

The 8th Circuit Court of Appeals put the forgiveness plan on hold Oct. 21 while considering an effort by the states of Nebraska, Missouri, Iowa, Kansas, Arkansas and South Carolina to block the program.

While the stay temporarily prevented the administration from actually paying debts, the White House has encouraged borrowers to continue filing for relief because the court order did not prevent applications or the consideration of applications.

White House press secretary Karine Jean-Pierre said the government disagreed with Thursday’s ruling and the Justice Department had appealed. She said so far 26 million people have applied for debt relief and 16 million people have already had their debt relief approved. The Department of Education would “process your appeal expeditiously once we win in court,” she said.

“The President and this administration are determined to help working Americans and the middle class get back on their feet while our opponents — backed by extreme Republican special interests — sued to prevent millions of Americans from receiving much-needed relief ‘ she said in a statement.

The legal challenges have created confusion over whether borrowers expecting debt relief will have to start making payments again on Jan. 1, when a pause triggered by the COVID-19 pandemic is due to expire.

Economists worry many people have yet to recover financially from the pandemic, and say if borrowers who were expecting debt relief made payments instead, many could default on the bills and become insolvent.

In his order Thursday, Pittman said the Higher Education Relief Opportunities for Students Act of 2003, commonly known as the HEROES Act, did not provide for the loan forgiveness program approval, which the Biden administration claimed did be.

The law allows the Secretary of Education to “waive or amend any statutory or regulatory provision that applies to student financial assistance programs … if the Secretary deems it necessary in connection with a war or other military operation or national emergency.” deems”.

The administration argued that facilitating the student loan had thus been approved as a means of dealing with the national emergency of the pandemic. Pittman disagreed, noting that a program of such massive importance required clear approval from Congress. The HEROES Act “does not give the Executive Branch clear congressional authorization to create a $400 billion student loan forgiveness program,” he wrote.

Pittman also dismissed the government’s arguments that the plaintiffs who filed the lawsuit lack standing. Plaintiffs Myra Brown and Alexander Taylor both have student loans, but Brown is not eligible for debt relief because their loans are held commercially, and Taylor is not eligible for the full $20,000 because he did not receive a Pell Scholarship.

The administration said they were not harmed by the loan forgiveness program and their “dissatisfaction that some other borrowers are receiving a greater benefit than themselves” gave them no reason to complain.

Pittman said they were harmed, however, because the government did not take public comments on the program’s eligibility requirements, meaning they had no opportunity to contribute to a program from which they would be at least partially excluded.

Reaction to the verdict was predictably mixed along political fault lines. The Student Borrower Protection Center has branded Pittman a “right-wing federal judge,” saying, “Tens of millions of student loan borrowers across the country have now blocked their vital debt relief as a result of this absurd and fabricated legal claim.”

Rep. Virginia Foxx of North Carolina, the ranking Republican on the House Education Committee, celebrated.

“Another nail has been added to the coffin of President Biden’s illegal student loan bailout, and hard-working taxpayers across the country are rightly rejoicing,” she said. “This administration continues to act as if its own self-appointed authority is legitimate in disbursing billions of dollars in student loans, but the rule of law says otherwise.”

Johnson reported from Seattle. Associated Press reporter Jim Salter contributed from St. Louis.

https://www.sltrib.com/news/nation-world/2022/11/11/us-judge-texas-strikes-down/ US judge in Texas scraps Biden’s loan forgiveness plan

Justin Scacco

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