The Biden Student Loan relief Plan Is Under Attack: Key Takeaways From the Court Decision It is prohibited.
President Biden’s plan to wipe out federal student loan debts for tens of millions of borrowers hit a stumbling block Thursday when a U.S. District Court judge in Texas declared it illegal and cancelled the debt relief programme.
A federal district court judge in Texas has rejected President Biden’s unprecedented student loan forgiveness initiative, effectively killing his plan to help millions of borrowers.
The decision, which came just weeks before student loan payments were set to resume in January, was quickly appealed by the federal government. The debt-cancellation programme is already on hold while a federal appeals court in St. Louis hears a separate lawsuit filed by six states opposing it.
Up to 40 million borrowers could receive $10,000 or more in student loan forgiveness under Biden’s programme if their earnings fell within the program’s income guidelines in 2020 or 2021. However, due to ongoing legal challenges, no borrower has received loan forgiveness under the initiative.
The judge’s justification for rejecting debt relief
It has been collected from the reliable sources –
Former President Donald Trump appointed Judge Mark T. Pittman, who wrote that the programme was a “complete usurpation” of congressional authority by the executive branch. Pittman rejected the Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration’s argument that, under the HEROES Act, Congress explicitly granted the president the authority to cancel student loan debts in times of national emergency, and that the COVID-19 pandemic is just such an emergency.
“We are not ruled in this country by an all-powerful executive wielding a pen and a phone,” Pittman wrote. “Instead, we are governed by a Constitution that establishes three distinct and autonomous branches of government.”
In the most recent suit, a conservative nonprofit organisation sued on behalf of two borrowers, claiming that the https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration did not follow proper procedures for establishing new programmes and regulations under the Administrative Procedures Act (APA). The Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration has argued that the HEROES Act of 2003 provides a foundation for enacting new emergency regulations without having to follow APA procedures.
“We strongly disagree with the District Court’s decision on our student debt relief programme,” said White House spokeswoman Karine Jean-Pierre. “While our opponents — backed by extreme Republican special interests — sued to prevent millions of Americans from receiving much-needed relief, the President and this Administration are determined to help working and middle-class Americans get back on their feet.”
The decision by the United States District Court in Fort Worth, Texas, differs from every other court ruling on Biden’s student loan forgiveness plan so far. Those previous decisions hinged on whether the party filing the lawsuit had standing to sue in the first place. To have standing, a party must show a concrete injury that is sufficiently related to the challenged programme. However, in the most recent decision, Judge Mark T. Pittman, a Trump appointee, dismissed the programme on the merits.
The appeals process could take several weeks, leaving borrowers in the dark.
The Biden Administration will appeal the decision on student loan forgiveness. The Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration slammed the court’s decision and promised to appeal further.
The White House confirmed late Thursday that it had already appealed the decision. The appeal will be heard by the 5th Circuit Court of Appeals, which is known for being the most conservative of all federal appeals courts. Following that, another appeal would take the case to the United States Supreme Court, which has previously refused to hear challenges to Biden’s relief plan. Borrowers are unlikely to receive a final answer on debt relief for several weeks.
Meanwhile, student loan payments will resume in the coming weeks. Back in September, US Education Secretary Miguel Cardona told NPR that he hoped to process as many debt relief applications as possible before the payment freeze expired on January 1. The decision made on Thursday makes it unlikely that the department will meet that target.
“We are disappointed by the Texas court’s decision to prevent loan relief from proceeding,” said U.S. Secretary of Education Miguel Cardona in a statement. “Despite efforts to obstruct our debt relief programme, we will not back down.” The Department of Justice has filed an appeal on our behalf, and we will continue to keep borrowers updated on our efforts to provide targeted relief.”
“We strongly disagree with the District Court’s ruling on our student debt relief programme,” said White House Press Secretary Karine Jean-Pierre. “While our opponents – backed by extreme Republican special interests – sued to prevent millions of Americans from receiving much-needed relief, the President and this Administration are determined to help working and middle-class Americans get back on their feet.”
This decision is based on a lawsuit.
The conservative Job Creators Network Foundation filed the case at the heart of Thursday’s decision on behalf of two federal student loan borrowers who believe they were unfairly denied relief.
One borrower’s federal loans are held by a commercial lender rather than the US Department of Education and are therefore ineligible for relief. The other borrower qualifies for $10,000 in relief but believes that because he is currently low-income, he should be eligible for the same level of relief — $20,000 — as borrowers who were low-income when they attended college.
The plaintiffs argued, among other things, that the Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration did not follow federal rules and should have allowed borrowers and the general public to express their concerns about eligibility before the programme was launched, though the https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration countered that the HEROES Act expressly allows it to do so.
“This ruling upholds the rule of law, which requires all Americans to have their voices heard by their federal government,” Elaine Parker, president of the Job Creators Network Foundation, said in a statement. “We hope that today’s decision by the court will pave the way for real solutions to the student loan crisis.”
Borrower advocates and some legal experts, however, were quick to criticise the judge’s decision.
“My first reaction was that this is motivated reasoning by a judge who wants to reach this conclusion.” According to Luke Herrine, an assistant professor of law at the University of Alabama, “the legal analysis is flawed.”
According to Persis Yu, managing counsel at the Student Borrower Protection Center, there is a significant disconnect between the plaintiffs’ alleged harm — not receiving the debt cancellation they believe they should have gotten — and the court’s remedy: denying cancellation to all federal student loan borrowers.
“I like to think of this lawsuit as a toddler issue.” “If I can’t have it, neither can you,” Yu says. “That is not how the law works.” And it is not how the law should be applied by the courts.”
An appeal of the Student Loan Forgiveness Decision Could Be Difficult
Legal experts for student loans have criticised the District Court’s decision, claiming that the judge erred by failing to address the issue of standing.
The case will be heard by the 5th Circuit Court of Appeals, one of the most conservative federal appeals courts in the country, as a result of the Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration’s appeal. That Court has recently issued some rulings, such as finding that the Consumer Financial Protection Bureau’s funding structure is unconstitutional, which suggests that appellate judges may be sceptical of Biden’s student loan forgiveness programme.
If the Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration is unable to persuade the 5th Circuit to overturn the Texas court’s decision, the https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration will file an appeal with the United States Supreme Court. However, there is no guarantee that the Supreme Court will hear the case, let alone rule in favour of the https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration. Notably, an appeal from the Fifth Circuit to the Supreme Court could end up before Justice Samuel Alito, the architect of the Dobbs v. Jackson Women’s Health Organization case, which overturned Roe v. Wade and federal constitutional protections for abortion rights.
How did we get here?
In the 2020 presidential election, Biden promised to forgive at least $10,000 in college debt per person.
In August, Biden announced his loan relief plan, promising to cancel up to $10,000 in loans for borrowers who did not receive Pell grants and $20,000 for those who did.
In September, twenty-two Republican governors wrote to Biden, questioning his authority to proceed with the forgiveness plan, and the Congressional Budget Office later estimated the initiative would cost $400 billion over the next 30 years.
Other Courts Have Yet to Speak
The latest legal setback is not the only one affecting Biden’s student loan forgiveness plan. In response to an appeal from a separate case, the 8th Circuit Court of Appeals blocked the programme in October. In that case, a coalition of Republican-led states sued the Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration, claiming that the loan forgiveness programme was illegal and would financially harm the states as a result of reduced revenue from borrowers consolidating their loans to qualify.
The suit was dismissed by a federal district court for lack of standing, but the states appealed to the 8th Circuit, which issued a temporary https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistrative stay. That stay is still in effect while the court decides whether to issue a more severe preliminary injunction. A decision is due any day now.
Meanwhile, as of Friday, the application for Biden’s student loan forgiveness programme was no longer available. A message on the application website reads, “Student Loan Debt Relief Is Blocked.”
Additional Student Loan Forgiveness Lines For You-
What Election Results Mean for Student Loan Forgiveness
Following the midterm elections, many states are still tabulating results. Democrats appear to have outperformed expectations in a number of state and national elections. Younger voters turned out in large numbers, potentially swinging close races toward Democrats. Some of these close races may have been influenced by student loan forgiveness programmes. Biden will almost certainly continue to rely on executive action and the regulatory process to expand student loan forgiveness options.
The https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration is still implementing the Limited PSLF Waiver, which served as a temporary extension of the Public Service Loan Forgiveness programme. A federal appeals court last month blocked Biden’s one-time student loan forgiveness initiative. A coalition of Republican-led states had filed a lawsuit declaring the plan unconstitutional. The outcome of the midterm elections would have no bearing on the 8th Circuit’s decision.
Is it Possible to Apply for Multiple Student Loan Forgiveness Programs? Yes — With Some Conditions
Several student loan forgiveness initiatives have been announced by the Biden https://bestrievu.com/wp-content/uploads/2022/06/petrol.jpgistration. Borrowers can apply for multiple programmes to take advantage of all available benefits. The Limited PSLF Waiver and IDR Account Adjustment are still in their early stages. These programmes have no cap or limit on the amount of debt forgiveness available. The IDR Account Adjustment will be implemented by the Education Department in July 2023.
Borrowers with federal Direct loans and FFELP loans held by the government will benefit. Some borrowers will require loan consolidation through the federal Direct consolidation loan programme. One-time debt relief is available for consolidation loans made up of commercial FFELP and Perkins loans that are not held by the government. Borrowers with these loans may be eligible for IDR Account Adjustment or PSLF programmes, but a federal court is currently blocking this.
Conclusion
A federal judge calls student loan relief unlawful, deepening limbo for borrowers. The federal government quickly appealed the decision. The debt-cancellation program was already on hold while a federal appeals court considers a separate lawsuit by six states. But no borrower has received loan forgiveness under the initiative due to ongoing legal challenges. A federal judge in Texas has struck down Vice President Joe Biden’s student loan forgiveness plan.
The appeals process could take weeks, leaving borrowers in limbo. Borrowers likely won’t know if they will have a final answer on debt relief until after the appeals process is complete. The Department of Justice has filed an appeal, and borrower advocates and legal experts were quick to find fault with the decision. They argued that borrowers should have been consulted before the program was rolled out. Biden’s appeal will bring the case to the 5th Circuit Court of Appeals, one of the most conservative federal appeals courts in the country.
The next step would be to appeal to the U.S. Supreme Court. There are no guarantees that the nation’s highest court would take up the case. Biden’s one-time student loan forgiveness initiative was blocked by a federal appeals court last month. Student loan forgiveness initiatives may have played a role in some of these close races. Borrowers with government-held federal Direct loans, as well as federally-held FFELP loans, will benefit.
