Student loan forgiveness: Federal court strikes down Biden’s program


Washington
CNN:

Student loan borrowers are now waiting indefinitely to see if they will receive debt relief under President Joe Biden’s student loan forgiveness program after a federal judge in Texas on Thursday struck down the program, declaring it illegal.

The Justice Department immediately appealed to the US 5th Circuit Court of Appeals. But that case must happen before the Biden administration can cancel any federal student loan debt under the program.

While the Biden administration has faced a number of legal challenges to the student loan forgiveness program since it was announced in August, Thursday’s decision is the most significant setback yet;

Biden’s program had already been suspended due to a separate legal challenge, but the administration continued to accept applications, receiving 26 million to date.

Under the program’s rules, eligible low- and moderate-income borrowers can receive up to $10,000 in federal student loan forgiveness and up to $20,000 in cancellation if they also received a Pell grant while enrolled in college.

Borrowers must wait for the government’s appeal to the 5th Circuit Court to proceed. While it can be difficult to keep track of all the legal challenges, borrowers can subscribe to Department of Education updates and check the Federal Student Aid website for more information.

A final court ruling could take months. If it overturns the lower Texas court’s ruling, the Biden administration could begin canceling student debt.

Also Read :  Qatar makes World Cup debut in a controversial tournament of firsts

But the Justice Department could also ask for an emergency stay of the Texas judge’s order. If upheld, and if another appeals court ends its stay on the program in a separate, pending case, the administration would be allowed to cancel the debt pending a final ruling by the 5th Circuit.

Initially, the Biden administration said it would begin forgiving student loans before payments resume in January after a lengthy pandemic hiatus.

But Thursday’s Texas decision puts that timeline in jeopardy.

“For the 26 million borrowers who have already given the Department of Education the information they need to be considered for debt relief, 16 million of whom have already been approved for discharge, the department will retain their information so it can quickly process their aid one time. we are winning in court,” White House press secretary Karin Jean-Pierre said Thursday.

“We strongly disagree with the District Court’s decision regarding our student debt relief program,” he said.

The Biden administration has argued that Congress gave the education secretary the authority to broadly discharge student loan debt under a 2003 law known as the HEROES Act.

But a federal judge in Texas found that the law did not give the executive branch express authorization from Congress to create the student loan forgiveness program.

Also Read :  New York snow: A potentially historic storm is bearing down on western New York state, bringing treacherous snowfall that could damage infrastructure

“The plan is therefore an unconstitutional exercise of Congress’s legislative authority and must be vacated,” wrote Judge Mark Pittman, who was nominated by then-President Donald Trump.

“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” he continued.

The Texas lawsuit was filed by the conservative group Job Creators Network Foundation in October on behalf of two defaulting borrowers.

One plaintiff does not qualify for the student loan forgiveness program because his loans are not covered by the federal government, and the other plaintiff can only qualify for $10,000 in debt relief because he did not receive a Pell grant.

They argued that they could not express their disagreement with the program’s rules because the administration had not submitted them through the formal notice-and-interpret rulemaking process under the Administrative Procedure Act.

“This decision upholds the rule of law that requires all Americans to make their voices heard by their federal government,” Job Creators Network Foundation President Elaine Parker said Thursday.

The advocacy group was founded by Bernie Marcus, a major Trump donor and former Home Depot CEO.

The Biden administration has been barred from canceling any debt since the 8th U.S. Circuit Court of Appeals administratively halted the program on Oct. 21.

Also Read :  Poland missile explosion: World leaders hold emergency meeting as 'Russian-made' weapon kills two in Przewodow

An appeals court has yet to rule on a lawsuit filed by six Republican-led states. A lower court judge dismissed the lawsuit on Oct. 20, ruling that the states lacked standing to appeal.

The Biden administration faces a number of other legal challenges to the plan. Superior Court Judge Amy Coney Barrett denied two separate applications to challenge the plan.

If Biden’s plan is allowed to move forward, individual borrowers who earned less than $125,000 in 2020 or 2021 and married couples or heads of households who earned less than $250,000 annually in those years could have up to $10,000 in federal student loan debt.

If a qualified borrower also received a federal Pell grant while attending college, the individual is eligible for up to $20,000 in debt forgiveness.

There are a number of federal student loans, and not all are eligible for aid. Federal Direct Loans, including subsidized loans, unsubsidized loans, parent PLUS loans and graduate PLUS loans, are eligible.

But federal student loans that are guaranteed by the government but held by private lenders are not eligible unless the borrower applies to consolidate those loans into a Direct Loan by Sept. 29.

This headline and story have been updated with additional information.

Source

Leave a Reply

Your email address will not be published.

Related Articles

Back to top button