U.S. District Judge Mark T. Pitman, appointed by Donald Trump, declared the policy illegal in Thursday’s order.
“In this country, we will not be ruled by an all-powerful executive with a pen and a phone,” Pittman wrote in the order. “Instead, we are ruled by the Constitution, which provides for three distinct and separate branches of government. “
The Biden administration had no immediate comment on the ruling, but officials have previously said they would oppose any order that obstructs the plan.
Pittman’s order comes after the U.S. Court of Appeals for the Eighth Circuit approved a stay of the loan forgiveness program last month in a separate lawsuit filed by six Republican-led states. The cases are one of a growing number of legal challenges to block Biden’s plans. Some of those lawsuits, including one filed in Indiana and one in Wisconsin, were dismissed for lack of standing, but others are ongoing.
Since Biden announced the plan in August, Republican attorneys general, top lawmakers and conservative groups have been discussing legal options for repealing Biden’s plan, which they say represents illegal executive overreach.A week after Biden unveiled the policy, the president of the Job Creators Network — founded by Republican donor Bernie Marcus, Co-founded Home Depot — told Fox News the group is building a legal team and working with outside counsel to prepare the lawsuit.
On Thursday, Elaine Parker, president of the Job Creators Network Foundation, praised the ruling, saying it “protects the rule of law and requires the voices of all Americans to be heard by the federal government.”
“This attempted illicit student loan bailout will do nothing to address the root cause of unaffordable tuition: greedy and bloated colleges, while sitting on $700 billion in endowments, year after year,” Parker said in a statement. “We hope that the court’s ruling today will lay the groundwork for a real solution to the student loan crisis.”
In the Texas case, plaintiffs have argued, in part, that the Biden administration made arbitrary decisions about who qualifies for debt relief and how much balance to cancel. Biden’s loan forgiveness program will cancel up to $10,000 of federal student debt for borrowers earning up to $125,000 a year or married couples earning up to $250,000 a year.borrower received
Pell Grants are eligible for an additional $10,000 in forgiveness.
One of the plaintiffs in the case, Alexander Taylor, had an income below the threshold and was eligible for a $10,000 loan to offset the $35,000 in student loans he took to earn his undergraduate degree at the University of Dallas, the indictment said. However, since he never received a Pell Grant (a form of federal aid for low-income students), he was not eligible for the additional $10,000 available to Pell recipients.
Another plaintiff in the lawsuit, Myra Brown, is ineligible for Biden’s program because her federal loans stemmed from the defunct Federal Family Education Loan (FFEL) program and were held by private entities. Until late September, commercial FFEL borrowers like Brown can consolidate their loans into direct loans to qualify for Biden’s plan. But the Education Department reversed the policy to block legal challenges from six states.
The decision left Brown owed $17,000 in student loans and unable to earn a graduate degree from Southern Methodist University in Dallas.
In court filings in response to the complaint, the Justice Department argued that the 2003 regulations supporting Biden’s plan did not require notice and comment. Known as the Heroes Act, the law empowers the education secretary to “relieve the hardships federal student loan recipients may experience as a result of the national emergency.”
Attorneys argue that the program’s parameters are based on research showing that low-income borrowers and Pell recipients are at significant risk of delinquency and default. They said Brown and Taylor were not entitled to any amount of loan forgiveness and that their grievances did not constitute specific harm.
Pittman questioned the use of the HEROES Act, saying “it does not provide a clear congressional mandate for the plan proposed by the Secretary of State.”
He added: “The courts are not turning a blind eye to the current political divisions in our country. However, preserving the separation of powers enshrined in our constitution is critical to the survival of our republic.”
Student advocates are increasingly concerned about the outcome of the lawsuit after Pittman recently told clients he plans to rule on the merits, rather than determine whether the borrower is eligible to sue.
Mike Pierce, executive director of the Student Borrower Protection Center, said: “That means he never really considered the long-term arguments the government made, never bothered to build a record based on actual facts, and instead issued an unreasonable one. Ideological tirade for comment,” the advocacy group said on Thursday.
This is a developing story.