Biden Administration Dealt Another Blow On Student Loan Forgiveness

The Biden administration’s student loan forgiveness plan was pushed back again on Wednesday after an appeals court refused to pause a previous ruling against the policy.

In November, U.S. District Judge Mark Pittman ruled against the student loan forgiveness plan, saying that it was illegal.

“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” Pittman wrote. “Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government.”

“We strongly disagree with the District Court’s ruling on our student debt relief program,” White House Press Secretary Karine Jean-Pierre said in response at the time. “The President and this Administration are determined to help working and middle-class Americans get back on their feet, while our opponents — backed by extreme Republican special interests — sued to block millions of Americans from getting much-needed relief.”

The U.S. Education Department had asked the 5th Circuit Court to put a hold on the previous ruling. It refused to do so on Wednesday, keeping Pittman’s ruling in place as the court issues a broader ruling on the Biden administration’s appeal. The court decided to accelerate the case’s timeline, however, to the “next available” oral argument.

The U.S. Court of Appeals for the 8th Circuit also recently ruled against Biden’s student loan forgiveness plan, putting forward an injunction that halted it. The ruling came after a group of six Republican-led states requested the court pause any debt forgiveness during its court proceedings.

The Biden administration argues that it has the legal authority for its proposal due to the 2003 Higher Education Relief Opportunities for Students Act (HEROES). The law allows the Education Secretary to get rid of or alter student loan debt in times of war and national emergencies for specific individuals.

Last month, the Biden administration took steps to ask the Supreme Court to weigh in on the plan and let it resume.

In the filing to the Supreme Court, U.S. Solicitor General Elizabeth B. Prelogar discussed the HEROES Act.

“Because borrowers who default on their student loans face severe financial consequences — including wage garnishment, long-term credit damage, and ineligibility for federal benefits — Congress specifically authorized the Secretary to waive or modify any applicable statutory or regulatory provision as he deems necessary to ensure that borrowers affected by a national emergency are not worse off in relation to their student loans,” she wrote.

The states involved in the legal case in the 8th Circuit disagree with the use of HEROES.

“The Act requires a real connection to a national emergency. But the Department’s reliance on the COVID-19 pandemic is a pretext to mask the President’s true goal of fulfilling his campaign promise to erase student-loan debt,” the states wrote.

“Hiding the real motive, the agency attempts to connect the Cancellation to the pandemic by citing current economic conditions supposedly caused by COVID-19. But those conditions are not directly attributable to the pandemic, so the Department has failed to adequately link the Cancellation to a national emergency,” they added.

The plan involves giving up to $10,000 in debt cancellation to qualifying student loan borrowers who make under $125,000 as individuals or $250,000 as a household. People who received Pell Grants could receive up to $20,000 in debt cancellation.

Prior to the legal challenges, the Department of Education had greenlit millions of requests for debt relief. The White House announced in November that almost 26 million people had applied and around 16 million applications were set to be approved.

The nonpartisan Congressional Budget Office estimated that Biden’s student loan forgiveness will cost around $400 billion. The Biden administration has claimed that it will cost around $300 billion.

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