A federal judge on Thursday struck down President Joe Biden's student loan debt cancellation program, declaring the action an "unconstitutional exercise of Congress's legislative power."
The ruling, coming from a court case in Texas, further complicates the administration's efforts to implement the program — which late last month was stalled by a legal injunction that has halted borrowers from having their applications processed and receiving debt cancellation.
Education Secretary Miguel Cardona said in a statement on Friday that the administration was "disappointed" in the ruling, and that the Department of Justice had already appealed the decision. He also noted that more than 26 million borrowers had already applied for relief, and more than half of those applications have already been approved and sent to loan servicers "to be discharged when allowed by the courts."
"We believe strongly that the Biden-Harris Student Debt Relief Plan is lawful and necessary to give borrowers and working families breathing room as they recover from the pandemic and to ensure they succeed when repayment restarts," Cardona said. "Separately, we remain committed to taking other actions to fix longstanding issues in the student loan forgiveness system and hold schools accountable for leaving students with mountains of debt and without the skills and preparation to find good jobs."
This latest case comes from two borrowers who, according to the legal filing, disagree with the administration's eligibility criteria. One borrower did not qualify for the program due to their loans being commercially held while the second borrower was ineligible for the full $20,000 in cancellation because they never received a Pell Grant.
The plaintiffs in the Texas case allege that the program violates the Administrative Procedure Act's notice-and-comment requirements, and that the secretary lacks the authority to implement the program.
While other cases have been unable to garner legal standing to bring a case against the administration, the federal judge outlined how these borrowers could be harmed by the administration's actions.
"Plaintiffs have a concrete interest in having their debts forgiven to a greater degree," Judge Mark Pittman of the Northern District of Texas wrote. "[The plaintiff's] inability to obtain the full benefit of debt forgiveness under the Program flows directly from the Program's eligibility requirements. Thus, Defendants' procedural error of not providing for a notice-and-comment period—which the Court must assume as true for standing—deprived Plaintiffs of ‘a non-illusory opportunity to pursue [the] benefit' of greater debt forgiveness and an opportunity to advocate for the expansion of the eligibility criteria of the Program."
Pittman also argued that it was not the court's role to determine whether the program constitutes good public policy and that it instead requires congressional authorization, even citing Speaker Nancy Pelosi's (D-Calif.) previous remarks that the president lacked the authority to implement such a program.
"In this country, we are not ruled by an all-powerful executive with a pen and a phone," the judge wrote in his ruling. "Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government."
Rep. Virginia Foxx (R-N.C.), ranking member of the House Committee on Education and Labor, applauded the decision and said that "hardworking taxpayers across the country are rightfully rejoicing."
"This administration continues to operate as if its own self-appointed authority in transferring billions of dollars in student loans is legitimate, but the rule of law says otherwise," Foxx said. "This radical scheme must be eviscerated entirely, and Republicans will continue to support legal challenges to achieve that end."
Publication Date: 11/11/2022