Biden’s student loan cancellation plan was struck down by a federal judge

Biden’s $400 billion spending plan was greeted with consternation by several Republicans in Congress after he announced it this summer. Link 

A federal court in Texas stopped Biden’s student loan cancellation program on Thursday night. The court ruled the proposal to erase hundreds of billions of dollars of debt would be beyond the authority of his executive and should be disqualified. Link

In the decision, U.S. District Judge Mark Pittman, who was appointed by the previous president Donald Trump, called the program “one of the most extensive exercises of legislative power that is not governed by authorization from Congress throughout the United States.” Link

“In our nation, we’re not controlled by an all-powerful president with the use of a pen and phone,” Pittman wrote. We are guided by the Constitution, which provides for three distinct and separate administrations.” Link

This was a huge win for Republicans who have been in a state of shock since Biden announced his plan last summer. The announcement came at the conclusion of a week during which the red wave they had hoped would help them gain control of each chamber of Congress during the midterm elections sank in stunning fashion. Link

Biden has argued for nearly 19 months over whether he was in the executive position to terminate the student loan obligation, but eventually backed the progressive side of the Democratic Party which urged him to perform the act as a measure of racial and economic justice in order to offer significant relief to the millions of borrowers who are recovering from a once-in-a-lifetime epidemic of student debt. Link

This plan would revoke the loan amount of $10,000 for those who make $125,000, or $250,000 in the case of married couples. In addition, the loan amount is $20,000 for those that were recipients of Federal Pell Grants. It was expected to cost as high as $400 billion. It would also wipe clean the student loan debt of approximately 40 million people who borrowed. Link

The application for the debt cancellation program was made live in the month of June and by the end of that month, 26 million borrowers had applied. It is worth noting that the Supreme Court has twice rejected requests to stop the cancellation of student debt. Justice Amy Coney Barrett, who handles emergency cases for the 7th Circuit, most recently denied a request to stop the program from two customers from Indiana. They claimed they would be eligible for debt relief, but would be affected more because of the tax implications for state residents. Link

White House officials defended the exercise of executive authority by pointing out that it was a matter of the Heroes Act. This gives the education secretary broad discretion in making these decisions in times of national emergency. Conservative groups such as Job Creators Network Foundation, which defended two borrowers who were not eligible for the program and filed the lawsuit, have described it as illegal power-grabbing. Link

The Texas judge was in agreement. “If an executive branch tries to make use of this delegated power to pass a law with enormous political and economic importance that law must be subject to the express authorization of Congress,” Pittman wrote. “If otherwise the executive branch violates the constitution when it uses ‘legislative power’ that is which are the responsibility of Congress.” Link

It was announced that the Justice Department announced it would contest the ruling. Notably the plan to reduce debt was previously suspended, being temporarily denied at the hands of the Eighth U.S. Circuit Court of Appeals in St. Louis. Link

Karine Jean-Pierre, White House Press Secretary, says her administration opposes the decision and assures borrowers that their debts will be “quickly discharged” after the administration’s victory in court. Link

“The President and this administration will do everything they can to help middle- and working-class Americans get back on their feet, while our adversaries backed by extremist Republican particular interests have filed lawsuits to stop thousands of Americans from receiving the needed help,” she said.

Education Secretary Migeul Cardona said that the program is “lawful and is necessary to provide families with children and borrowers some breathing space while they recuperate from the pandemic.” “We are dissatisfied with this decision by the Texas court to stop the loan relief program moving forward,” he said. “Amid attempts to stop this program of debt relief, we’re not stepping down.” Link