A Texas federal judge on Thursday overturned President Joe Biden’s executive branch decision to forgive hundreds of billions of dollars in student debt, further clouding the situation for millions of borrowers who applied for a program already on hold due to legal obstacles.
“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” Judge Mark Pittman of the U.S. District Court for the Northern District of Texas wrote in his 26-page decision, siding with the side of conservative advocacy. group that brought the case.
The law cited by Biden to justify his action — the Heroes Act of 2003, which allows the education secretary to override student loan regulations during times of war or national emergency — does not provide clear congressional authorization” for the president’s action, Pittman wrote. .
The Biden administration said late Thursday that the Justice Department appealed the decision, which goes against rulings by other district court judges across the country who dismissed challenges from other plaintiffs for default. standing.
“The president and this administration are committed to helping working and middle-class Americans get back on their feet, while our opponents — backed by extreme Republican special interests — have filed a lawsuit to stop millions Americans to get much-needed help,” Karine Jean-Pierre, the White House press secretary, said in a statement.
Biden’s plan was already on hold after the United States Court of Appeals for the 8th Circuit granted a temporary stay last month in response to an appeal filed by six Republican-led states, while the court appeal examines their request for an injunction blocking any cancellation of debt.
Nearly 26 million borrowers have applied for federal student loan debt forgiveness under the plan Biden announced in August, and the government has already approved 16 million applications, the president said on Twitter last week. . But no debt will be forgiven unless the courts allow the Department of Education, which holds the loans, to sue. Jean-Pierre said the department would retain plaintiffs’ information “so it can quickly process their relief once we win in court.”
The case is expected to go to the Supreme Court.
Judge Amy Coney Barrett, without comment, dismissed two previous challenges to Biden’s debt cancellation plan. Last month it dismissed a case brought by a Wisconsin ratepayers association, and last week it dismissed a complaint from Indiana borrowers. In both cases, the lower courts had previously dismissed the challenges.
The Texas case was backed by the Job Creators Network Foundation, an affiliate of a right-wing small business trade group, on behalf of two federal student borrowers. One is not eligible for relief under Biden’s plan because its federal loans are not eligible for cancellation. The other was not eligible for the scheme’s maximum $20,000 relief, which was reserved for borrowers who were also receiving Pell grants for low-income families. Their complaint called Biden’s plan “irrational, arbitrary and unfair.”
“This decision protects the rule of law,” said Elaine Parker, president of the foundation. “We hope today’s court ruling will lay the groundwork for real solutions to the student loan crisis.
Biden’s plan would forgive up to $10,000 in debt for those earning less than $125,000 a year and up to $20,000 for those who received Pell grants. It would be one of the costliest executive actions in history, with a price tag the nonpartisan Congressional Budget Office estimates at $400 billion.
Pittman, who was appointed in 2019 by President Donald Trump, concluded that the plaintiffs have standing because, among other factors, they “have a concrete interest in having their debts forgiven to a greater degree” than the plan. of Biden did not allow it and would be harmed if it unfolded as planned. And he wrote that debt cancellation “is an agency action of great economic and political significance” and is subject to the “major issues doctrine,” a court-created principle that requires Congress to explicitly authorize radical actions by government agencies.
This principle, which the Supreme Court relied on in its recent decision to limit the powers of the Environmental Protection Agency, has also been raised by states pursuing their cases in the 8th Circuit Court of Appeals. .