Nov 10 (Reuters) – A federal judge in Texas ruled on Thursday that President Joe Biden’s plan to cancel hundreds of billions of dollars in student loans is illegal and should be thrown out, handing a victory to conservative opponents of the program.
U.S. District Judge Mark Pittman, an appointee of former Republican President Donald Trump in Fort Worth, called the program an “unconstitutional use of Congress’ legislative power” as he ruled that two borrowers who were sued by a conservative advocacy group are supported.
The debt relief plan has already been upheld by the 8th US Circuit Court of Appeals based in St. Louis.
The judge’s decision came in a lawsuit by two creditors who were not eligible in part or in whole for the loan forgiveness that Biden offered the plan. Prosecutors argued that it did not follow proper regulatory procedures and was illegal.
The lenders were backed by the Job Creators Network Foundation, a conservative advocacy group founded by Bernie Marcus, co-founder of Home Depot ( HD.N ).
The US Department of Justice soon appealed the decision. White House Press Secretary Karine Jean-Pierre said in a statement that the administration strongly disagrees with the decision.
About 26 million Americans have applied for student loan forgiveness, and the U.S. Department of Education has already approved 16 million applications. Jean-Pierre said the department will keep their information “so that when we win in court it can pay for them quickly.”
“We will never stop fighting for hard-working Americans who need it most — no matter how many obstacles our adversaries and special interests try to get in our way,” she said.
Biden’s plan has been the subject of several lawsuits by attorneys general and conservative state law groups, but prosecutors had tried before Thursday to convince courts that they were harmed enough to sue.
The plan, announced in August, calls for $10,000 in student loan forgiveness for borrowers making less than $125,000 a year, or $250,000 for married couples. Borrowers who receive Pell Grants to benefit low-income college students will have up to $20,000 of their debt forgiven.
The nonpartisan Congressional Budget Office calculated in September that the loan forgiveness would eliminate about $430 billion of the $1.6 trillion in outstanding student debt and that more than 40 million people would be eligible to benefit.
In his 26-page ruling, Pittman said it didn’t matter whether Biden’s plan was good public policy because the program was “one of the largest exercises of legislative power without congressional authority in the history of the United States.”
Pittman wrote that the HEROES Act — a law that provides loan assistance to military personnel and was relied upon by the Biden administration to implement the aid plan — did not authorize the $400 billion student loan forgiveness program.
“In this country we are not governed by a powerful executive with a pen and a telephone,” Pittman wrote. “Instead, we are governed by a constitution that provides for three separate and independent branches of government.”
Elaine Parker, president of the Job Creators Network Foundation, said in a statement that the decision “protects the rule of law that requires all Americans to have their voices heard by their federal government.”
Reporting from Nate Raymond in Boston; Editing by Sandra Maler, Rosalba O’Brien and Kenneth Maxwell
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