Biden Admin appeals student loan relief ruling
Newslooks- (AP)
“We believe strongly that the Biden-Harris Student Debt Relief Plan is lawful and necessary to give borrowers and working families breaking room as they recover from the pandemic and to ensure they succeed when repayment starts,” he said.
In a statement Thursday, White House press secretary Karine Jean-Pierre called out the “extreme Republican special interests” behind the legal opposition to the forgiveness plan. She said the president was “determined” for the plan to go ahead.
“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,” she said.
In a 26-page order, US District Judge Mark Pittman, an appointee of former president Donald Trump, ruled that the Biden administration did not have “clear congressional authorization” to create the program, which is estimated to eliminate about $430 billion in student debt for more than 40 million people. The case in question was filed by two borrowers who did not qualify for the relief and is one of several lawsuits filed by opponents of the plan.
In a statement Thursday night, Secretary of Education Miguel Cardona said the Biden administration would appeal the ruling.
“We believe strongly that the Biden-Harris Student Debt Relief Plan is lawful and necessary to give borrowers and working families breaking room as they recover from the pandemic and to ensure they succeed when repayment starts,” he said.
In a statement Thursday, White House press secretary Karine Jean-Pierre called out the “extreme Republican special interests” behind the legal opposition to the forgiveness plan.
She said the president was “determined” for the plan to go ahead.
“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,” she said.
On Friday, the website where people registered for forgiveness announced the plan had been blocked. “As a result, at this time, we are not accepting applications. We are seeking to overturn those orders,” the notice read. “If you’ve already applied, we’ll hold your application.”
More than 26 million people have already signed up for the program, and 16 million applications have been approved. If an appeal is successful, loan servicers could move forward with discharging their debt.
In August, Biden announced that the government would forgive up to $10,000 in federal student loan debt for Americans making less than $125,000 per year, fulfilling a campaign promise to ease the economic suffering of the millions of people saddled with outstanding debt from loans they took out for school.
According to court documents, the Department of Education was relying on the Higher Education Relief Opportunities for Students Act of 2003, a law that allows the education secretary to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” in the event of war, a military operation, or a national emergency.
In invoking the authority provided under the law, Cardona deemed that the relief program warranted a waiver because of the COVID-19 pandemic, which was declared a national emergency by Trump in 2020.
While Pittman agreed that the pandemic did qualify as a national emergency under the act, he questioned whether the law was intended to authorize loan forgiveness. He also said it was “unclear” whether the relief program was necessary and if the pandemic was still, in fact, an emergency.
“Whether the Program constitutes good public policy is not the role of this Court to determine,” Pittman wrote. “Still, no one can plausibly deny that it is either one of the largest delegations of legislative power to the executive branch, or one of the largest exercises of legislative power without congressional authority in the history of the United States.”
An appeals court had temporarily blocked the program last month as it considers a separate case filed by six Republican-led states for an injunction.
A U.S. judge in Texas on Thursday blocked President Joe Biden’s plan to provide millions of borrowers with up to $20,000 apiece in federal student-loan forgiveness — a program that was already on hold as a federal appeals court in St. Louis considers a separate lawsuit by six states challenging it.
District Court Judge Mark Pittman, an appointee of former President Donald Trump based in Fort Worth, said the program usurped Congress’ power to make laws. The Trump-appointed judge called President Biden’s student loan forgiveness program “one of the largest exercises of legislative power without congressional authority” in the country’s history.
“In this country, we are not ruled by an all-powerful executive with a pen and a phone. Instead, we are ruled 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 division in our country. But it is fundamental to the survival of our Republic that the separation of powers as outlined in our Constitution be preserved.”
The debt forgiveness plan would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven.
The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans.
The 8th U.S. Circuit Court of Appeals had put the forgiveness plan on hold Oct. 21 while it considered an effort by the states of Nebraska, Missouri, Iowa, Kansas, Arkansas and South Carolina to block the program.
While the stay temporarily stopped the administration from actually clearing debt, the White House has encouraged borrowers to continue applying for relief, saying the court order did not prevent applications or the review of applications.
White House Press Secretary Karine Jean-Pierre said the administration disagreed with Thursday’s ruling and the Department of Justice had filed an appeal. She said so far 26 million people had applied for debt relief, and 16 million people had already had their relief approved. The Department of Education would “quickly process their relief once we prevail in court,” she said.
“The President and this Administration are determined to help working and middle-class Americans get back on their feet, while our opponents — backed by extreme Republican special interests — sued to block millions of Americans from getting much-needed relief,” she said in a statement.
The legal challenges have created confusion about whether borrowers who expected to have debt canceled will have to resume making payments come Jan. 1, when a pause prompted by the COVID-19 pandemic is set to expire.
Economists worry that many people have yet to rebound financially from the pandemic, saying that if borrowers who were expecting debt cancellation are asked to make payments instead, many could fall behind on the bills and default.
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 the authorization for the loan forgiveness program that the Biden administration claimed it did.
The law allows the secretary of education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs … as the Secretary deems necessary in connection with a war or other military operation or national emergency.”
The administration argued that the student loan relief was thus authorized as a means of dealing with the national emergency of the pandemic. Pittman disagreed, finding that a program of such massive import required clear congressional authorization. The HEROES Act “does not provide the executive branch clear congressional authorization to create a $400 billion student loan forgiveness program,” he wrote.
Pittman also rejected the government’s arguments that the plaintiffs who brought the lawsuit lacked standing. Plaintiffs Myra Brown and Alexander Taylor both have student loans, but Brown is ineligible for debt relief because her loans are commercially held, and Taylor is not eligible for the full $20,000 because he didn’t receive a Pell grant.
The administration said they weren’t harmed by the loan forgiveness program and their “unhappiness that some other borrowers are receiving a greater benefit than they are” did not give them grounds to sue.
Pittman said they were harmed, however, because the government did not take public comment on eligibility requirements for the program, meaning they had no chance to provide input on a program they would be at least be partially excluded from.
Reaction to the ruling was predictably mixed along political fault lines. The Student Borrower Protection Center blasted Pittman as a “right-wing federal judge,” saying “tens of millions of student loan borrowers across the country now have their vital debt relief blocked as a result of this farcical and fabricated legal claim.”
Rep. Virginia Foxx of North Carolina, the ranking Republican on the House education committee, celebrated it.
“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,” she said. “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.”
