Federal Judge Axes Biden’s Student Loan Debt Relief Plan

A federal judge in Texas ruled on Thursday that President Joe Biden’s plan to cancel hundreds of billions of dollars in student loan debt was illegal and must be vacated, handing conservative opponents of the program a victory.

As he ruled in favour of two borrowers backed by a conservative advocacy group, 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’s legislative power.”

Reuters reported that Biden’s White House did not respond immediately.

The debt relief plan was already temporarily halted by the 8th U.S. Circuit Court of Appeals in St. Louis while it considered a request by six Republican-led states to enjoin it while they appealed the dismissal of their own lawsuit.

The ruling came in response to a lawsuit filed by two borrowers who were either partially or completely ineligible for the loan forgiveness plan proposed by Biden.

The plaintiffs claimed it was illegal because it did not follow proper rulemaking procedures.

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

Several lawsuits have been filed against Biden’s plan by conservative state attorneys general and legal groups, but plaintiffs had struggled to convince courts that they were harmed in such a way that they had standing to sue before Thursday.

The plan, announced in August, calls for borrowers earning less than $125,000 per year, or $250,000 for married couples, to have up to $10,000 in student loan debt forgiven.

Borrowers who received Pell Grants for low-income college students will have up to $20,000 in debt forgiven.

In September, the nonpartisan Congressional Budget Office estimated that debt forgiveness would eliminate approximately $430 billion of the $1.6 trillion in outstanding student debt, with over 40 million people eligible to benefit.

Pittman stated in his 26-page ruling that whether or not Biden’s plan was good public policy was irrelevant because the program was “one of the largest exercises of legislative power without congressional authority in the history of the United States.”

Pittman claimed that the HEROES Act, which provided loan assistance to military personnel and was used by the Biden administration to pass the relief plan, did not authorize the $400 billion student loan forgiveness program.

“We are not ruled in this country by an all-powerful executive wielding a pen and a phone,” Pittman wrote. “Instead, we are governed by a Constitution that establishes three distinct and autonomous branches of government.”

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