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Margaret Mia

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Biden administration appeals debt-relief ruling


The U.S. Department of Education stopped accepting applications for student loan forgiveness and the 26 million pending applications are in limbo after a federal judge in Texas ruled that the plan was unconstitutional.

U.S. District Judge Mark Pittman wrote that the Biden administration didn’t have the authority to forgive up to $20,000 in federal student loans for eligible Americans. The administration has said that the Higher Education Relief Opportunities for Students, or HEROES, Act of 2003 gives Education Secretary Miguel Cardona the ability to relieve student debts for those affected by a national emergency.

But Pittman wrote that the act didn’t specifically mention loan forgiveness.

“The HEROES Act—a law to provide loan assistance to military personnel defending our nation—does not provide the executive branch clear congressional authorization to create a $400 billion student loan forgiveness program,” wrote Pittman, who was appointed by former president Trump. “The program is thus an unconstitutional exercise of Congress’s legislative power and must be vacated.”

Breaking News
U.S. appeals court on
Monday imposes preliminary
injunction to block debt
relief plan. Read more
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The Biden administration appealed the ruling to the U.S. Court of Appeals for the Fifth Circuit, which is dominated by Republican appointees. Debt-relief advocates are decrying the ruling as “politically motivated” and “a miscarriage of justice” and called on the administration to extend the pause on student loan payments, which is set to wrap up at the end of the year.

“The Biden Administration must use this decision as an opportunity to make it clear that the student loan system will remain shut off as long as these partisan legal challenges persist,” said Mike Pierce, executive director of the Student Borrower Protection Center, in a statement. “Student loan borrowers should never be sacrificed as pawns in Republicans’ political games.”

Persis Yu, deputy executive director and managing counsel for the center, said in a statement that the order is “a tragic reminder of the tightening grip that special interests have on our legal system.”

“It is disappointing to see this judge pervert the law in order to achieve a politically motivated outcome,” Yu said.

The Biden administration announced in August that it would forgive $10,000 in federal student loans for Americans earning less than $125,000 and $250,000 for couples filing taxes jointly. Pell Grant recipients would be eligible for an additional $10,000 in relief.

The application opened in October, and more than 26 million people have applied for relief. About 16 million applications have been approved and sent to loan servicers for discharge when allowed by courts. Before Pittman’s ruling Thursday, the administration already was not able to forgive student loans because of a temporary stay issued by the U.S. Court of Appeals for the Eighth Circuit in a separate lawsuit. Both sides in that case have filed briefs, but the court has not moved forward, despite setting an expedited briefing schedule.

“We believe strongly that the Biden-Harris Student Debt Relief Plan is lawful and necessary to give borrowers and working families breathing room as they recover from the pandemic and to ensure they succeed when repayment restarts,” Cardona said in a statement. “We are disappointed in the decision of the Texas court to block loan relief moving forward. Amidst efforts to block our debt relief program, we are not standing down.”

White House Press Secretary Karine Jean-Pierre wrote on Twitter that the Education Department will hold on to the information of those who applied so applications can be processed “once we prevail in court.”

“We will never stop fighting for hardworking Americans most in need—no matter how many roadblocks our opponents and special interests try to put in our way,” Jean-Pierre wrote.

The Job Creators Network Foundation, which is run by Republican donor Bernie Marcus and backed the Texas lawsuit, celebrated Pittman’s ruling.

“This ruling protects the rule of law which requires all Americans to have their voices heard by their federal government,” foundation president Elaine Parker said in a statement. “This attempted illegal student loan bailout would have done nothing to address the root cause of unaffordable tuition: greedy and bloated colleges that raise tuition far more than inflation year after year while sitting on $700 billion in endowments. We hope that the court’s decision today will lay the groundwork for real solutions to the student loan crisis.”

North Carolina representative Virginia Foxx, the top Republican on the House Committee for Education and Labor, also cheered the ruling.

“Yet another nail has been added to the coffin of President Biden’s illegal student loan bailout, and hardworking taxpayers across the country are rightfully rejoicing,” Foxx said in a statement. “This administration continues to operate as if its own self-appointed authority in transferring billions of dollars in student loans is legitimate, but the rule of law says otherwise. This radical scheme must be eviscerated entirely, and Republicans will continue to support legal challenges to achieve that end.”

The two plaintiffs in the foundation’s lawsuit, Myra Brown and Alexander Taylor, took issue with the debt-relief plan because they wouldn’t benefit from it and didn’t have the chance to comment on the proposal. Brown does not qualify for debt relief under the plan because she has commercially held federal loans, while Taylor doesn’t qualify for the additional $10,000 for Pell Grant recipients because he didn’t receive a Pell Grant.

“If the department is going to pursue debt forgiveness, plaintiffs believe that their student loan debt should be forgiven too,” the initial complaint states. “Ms. Brown believes it is irrational, arbitrary, and unfair to exclude her from the Program because her federal student loans are commercially held and not in default. Mr. Taylor believes that it is irrational, arbitrary, and unfair to calculate the amount of debt forgiveness he receives based on the financial circumstances of his parents many years ago.”

The plaintiffs argued the administration should’ve gone through the notice-and-comment process while crafting its debt-relief program and that it doesn’t have the authority under the HEROES Act to forgive billions in student loans.

The administration pushed for the lawsuit’s dismissal in court filings, as it has in other similar lawsuits.

“Plaintiffs’ alleged harm—that they will not receive the full measure of relief offered to other borrowers under the program—is nothing but a generalized grievance shared by tens of millions of borrowers that does not confer standing,” the administration’s lawyers wrote in a brief. “Nor are plaintiffs’ purported injuries redressable by an order enjoining debt relief for those included in the program, as it would not require the department to expand the program to include plaintiffs.”

Pittman sided with the plaintiffs in his order, which effectively dissolved the debt-relief program. The plaintiffs initially sought a nationwide injunction, but after an Oct. 25 hearing, Pittman opted to rule on the actual merits of the case.

Lawyers for the administration objected to that decision, while the plaintiffs supported Pittman’s decision to consolidate their motion into a motion for summary judgment.

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



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