Comment A federal judge in Texas on Thursday struck down President Biden’s student loan forgiveness program, handing a victory to a conservative advocacy group that sued to overturn the plan. The Job Creators Network Foundation filed a lawsuit in October on behalf of a borrower who does not qualify for full $20,000 debt relief and one who is not fully eligible. The lawsuit alleges the administration violated federal procedures by denying borrowers the opportunity to submit public comments before disclosing the program. U.S. District Judge Mark T. Pittman, who was appointed by Donald Trump, declared the policy illegal in Thursday’s order. “In this country, we are not ruled by an all-powerful executive with a pen and a telephone,” Pittman wrote in his order. “Rather, we are governed by a Constitution that provides for three distinct and independent branches of government.” The Biden administration did not immediately comment on the decision, but officials have previously said they would fight any order blocking the plan. Pittman’s order comes after the U.S. Court of Appeals for the 8th Circuit last month granted a stay against the loan forgiveness program in a separate lawsuit brought by six Republican-led states. The cases are among a growing number of legal challenges to stop Biden’s program. Some of those lawsuits, including one filed in Indiana and another in Wisconsin, were dismissed for lack of standing, but others are pending. Republican attorneys general, top lawmakers and conservative groups have been discussing legal options to overturn Biden’s plan, which they say represents illegal executive overreach, since he announced it in August. A week after Biden unveiled the policy, the president of the Job Creators Network — founded by Bernie Marcus, a GOP donor who co-founder of Home Depot — told Fox News the group was putting together a legal team and working with outside counsel to prepare a lawsuit. On Thursday, Elaine Parker, president of the Job Creators Network Foundation, praised the decision and said it “protects the rule of law that requires all Americans to have their voices heard by their federal government.” “This attempted illegal student loan bailout would have done nothing to address the root cause of unaffordable tuition: greedy and bloated colleges that raise tuition far more than inflation year after year while sitting on $700 billion in endowments ,” Parker said in a statement. “We hope that today’s court decision will lay the groundwork for real solutions to the student loan crisis.” In the Texas case, the plaintiffs argued, in part, that the Biden administration made arbitrary decisions about who would qualify for debt relief and how much of their balance would be canceled. Biden’s loan relief plan would cancel up to $10,000 in federal student debt for borrowers earning up to $125,000 a year or up to $250,000 a year for married couples. Borrowers received Pell grants are eligible for an additional $10,000 in forgiveness. Alexander Taylor, one of the plaintiffs in the case, falls within the income limit and is eligible to deduct $10,000 of the $35,000 in student loans he holds for an undergraduate degree from the University of Dallas, according to the complaint. However, because he has never received a Pell grant, a form of federal aid for low-income students, he does not qualify for the extra $10,000 provided to Pell recipients. Myra Brown, the other plaintiff in the lawsuit, is ineligible for Biden’s plan because her federal loans, which originated from the defunct Federal Family Education Loan (FFEL) program, are held by private entities. Until late last month, FFEL commercial borrowers like Brown could consolidate their loans into a Direct Loan to become eligible for Biden’s plan. But the Department of Education reversed the policy to prevent legal challenges like the one brought by the six states. The decision left Brown, who owes $17,000 in student loans for a master’s degree from Southern Methodist University in Dallas, without access to the program. In a court filing responding to the complaint, the Justice Department argues that the 2003 statute underpinning Biden’s plan does not require notice and comment. This law, known as the Heroes Act, authorizes the secretary of education “to alleviate hardships that recipients of federal student loans may experience as a result of national emergencies.” Justice attorneys argue that the program’s parameters were informed by research showing that the risk of delinquency and default is acute among lower-income borrowers and Pell recipients. They said Brown and Taylor are not entitled to any amount of loan forgiveness and their complaints do not amount to a specific injury. Pittman questioned the use of the Heroes Act, saying it “does not provide clear congressional authorization for the program the Secretary is proposing.” He added: “The Court is not turning a blind eye to the current political division in our country. But it is fundamental to the survival of our Republic to preserve the separation of powers as described in our Constitution.” Advocates for the students grew increasingly concerned about the outcome of the lawsuit after Pittman recently told the parties that he planned to rule on the merits of the case, rather than determine whether the borrowers had standing to sue. “It meant that he never considered the government’s solid arguments, never bothered to create a record based on actual facts, and instead issued a poorly reasoned ideological suggestion of an opinion,” said Mike Pierce, executive director of the Student Borrowers Protection Center. defense team, he said Thursday. This is a developing story.
