A federal judge in Texas struck down the Biden administration’s sweeping student loan forgiveness plan, calling it “one of the largest exercises of legislative power without congressional authority in the history of the United States.”
U.S. District Judge Mark Pittman, an appointee of President Donald Trump, sided with two borrowers in Texas who argued the government violated federal administrative procedure in implementing the plan.
“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” Pittman wrote in an order declaring the policy unlawful. “Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government.”
The loan forgiveness plan is already on hold under an emergency stay from the 8th U.S. Circuit Court of Appeals in a separate lawsuit brought by six Republican-led states. The plan has drawn a litany of legal challenges since its inception, several of which have been dismissed for lack of standing.
The Justice Department said it would appeal the decision. White House press secretary Karine Jean-Pierre said the administration strongly disagreed with the ruling.
“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,” Jean-Pierre said in a statement. “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.”
Pittman’s order Thursday was issued in a lawsuit brought by the Job Creators Network Foundation, a conservative advocacy group, on behalf of two Texans who claim that their education debt was unfairly excluded from the program.
Maya Brown and Alexander Taylor both hold debt that is not eligible for the full scope of forgiveness under the plan and they claimed that the Biden administration made arbitrary decisions on loan forgiveness eligibility and didn’t allow an opportunity for public comment on the proposal.
Biden’s plan, which applies to federally administered loans, calls for $10,000 in relief per borrower, subject to income caps of $125,000 per individual and $250,000 per household. Recipients of Pell Grants, federal aid targeted at low-income students, can be forgiven an additional $10,000.
Brown has $17,000 in debt from attending the University of Texas, El Paso and Southern Methodist University, but it’s commercially held and therefore doesn’t qualify. Taylor borrowed $35,000 to attend the University of Dallas and argues that it’s unfair that he’s not eligible for the additional $10,000 in relief because he didn’t receive a Pell Grant.
The case is Brown v. U.S. Department of Education, 22-cv-00908, US District Court, Northern District of Texas (Fort Worth).
(Bloomberg staff writer Jordan Fabian contributed to this story.)
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