Federal Judge Strikes Down Biden’s Student Debt Relief Plan: The latest legal challenge to President Joe Biden’s student loan forgiveness program—which has been the target of numerous attacks from right groups—was dismissed on Thursday by a federal judge in North Texas.
According to court documents, U.S. District Judge Mark Pittman found the loan forgiveness program illegal because Biden did not adhere to federal regulations that would have allowed for public discussion before to the policy’s release.
On behalf of two borrowers who do not meet the requirements for all of the program’s benefits, the Job Creators Network Foundation filed the case in the North Texas court in October. These borrowers objected to the program’s qualifying requirements, but according to the lawsuit, they were unable to do so.
After the U.S. Court of Appeals for the 8th Circuit temporarily suspended the program last month in response to a complaint from six GOP-led states, the latest attack on Biden’s loan forgiveness programs came.
The Texas lawsuit is the latest in a slew of court cases that oppose the loan forgiveness program that Biden unveiled in August. In October, borrowers began submitting applications for the scheme.
Since then, the program has come under fire from Republicans and other advocacy groups for being a gift to high-paid professionals. In a letter he signed in September, Governor Greg Abbott said that forgiving student loans would hurt the working class.
However, the loan forgiveness program is not available to anyone who makes more than $125,000 annually. Except for those who get Pell Grants, which are meant for students from low-income families, eligible candidates are only eligible for a maximum of $20,000 in relief.
According to the Texas Higher Education Coordinating Board, 56% of four-year public university graduates in 2021 had a student loan debt of around $25,000.
Low-income borrowers and people of color, who are more likely to be eligible for federal financial aid and have greater levels of student loan debt, will be particularly affected by Biden’s decision to forgive more money for low-income students who met the requirements for federal Pell Grants.
The online application site for student debt relief, which was still taking applications as of Thursday night, was shut down by the U.S. Department of Education on Friday.
“Our student debt reduction program is currently being obstructed by court orders. Therefore, we are not taking applications at this time. We are attempting to have those orders reversed” Reads the website.
The Texas lawsuit asserts that by omitting to offer a public comment period, Biden’s program broke the Administrative Procedure Act. The complaint asserts that the Secretary of Education lacks the jurisdiction to put the scheme into effect.
Alexander Taylor, one of the plaintiffs, will only be entitled to a $10,000 write-off of his student loans because he was not awarded a Pell Grant, which is exclusively available to low-income students.
Myra Brown, the other suit, has loans that are privately held and are no longer protected by Biden’s plan. Prior to the Education Department changing its policy in response to many lawsuits from conservative states, commercially owned loans like Brown’s could be combined into Direct Loans, which are eligible for Biden’s program.
— The Hill (@thehill) November 11, 2022
According to The Intercept, Brown already benefited from a federal loan forgiveness program as the owner of Desert Star Enterprises Inc. According to the publication, Brown’s business received a $48,000 business loan, of which $42,997 was forgiven in April as part of the Paycheck Protection Program.
The Justice Department claimed last month that Biden’s plan does not necessitate notice and discussion in response to the complaint.