The Biden Administration says roughly 26 million Americans have already applied for the program.
In August, President Joe Biden announced that he was authorizing a student loan debt forgiveness program for up to $10,000 of student loan debt per borrower for those who make under $125,000 annually. For married couples who file jointly and make under $250,000, the same relief could be given per person.
It was estimated that Biden’s forgiveness plan would cost taxpayers roughly $300 billion.
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A lawsuit was filed in Texas challenging the legality of the program and on Thursday, a federal judge said it was unconstitutional.
The Plaintiffs, Job Creaters Network Foundation who were acting on behalf of two student loan borrowers, argued that borrowers of federal loans that are not held by the Department of Education did not qualify for relief which was an unfair exclusion.
The overall argument was that the Biden Administration did not follow federal rules and should have allowed all borrowers and the general public the right to voice their concerns about eligibility before launching the program.
Judge Mark T. Pittman, a U.S. District Judge in Texas, called it “unlawful” and vacated the debt relief program in his ruling. He added that it was a “complete usurpation” of congressional authority by the executive branch.
The Biden Administration’s legal team argued that the President was, in fact, given the authority to erase student loan debts during a national emergency under the HEROES Act. His team argued that the COVID-19 pandemic met the criteria.
“We strongly disagree with the District Court’s ruling on our student debt relief program,” White House Press Secretary Karine Jean-Pierre said, according to NPR. “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 White House has since appealed the decision and the case will now move to the 5th Circuit Court of Appeals. The matter could end up at the U.S. Supreme Court depending on the outcome.
This is only one of many lawsuits which could put a stop to the program. Various states and Republican lawmakers are considering legal action.
In Mississippi, U.S. Senator Roger Wicker (R) has been vocal in his opposition to what he says is a debt transfer.
“This past August, in a bid to improve his standing with young voters, President Biden announced that he will transfer vast sums of student debt to the American taxpayer. His plan – which is really a decree since Congress never approved it – will ‘forgive’ up to $10,000 in student debt for eligible individuals making under $125,000 and up to $20,000 for Pell grant recipients,” Wicker wrote in an op-ed. “As executive orders go, this is one of the most expensive in history, costing an estimated $400 billion. It is also an assault on Congress’s constitutional power of the purse, as lawmakers never authorized money for this purpose.”
READ MORE: WICKER: Biden Makes Taxpayers Shoulder Student Debt
Currently, student loan payments are set to resume in January.
On November 3, the Administration announced that roughly 26 million Americans had already provided the Department of Education with the necessary information to apply for the debt relief. They anticipated roughly 16 million would be approved by the end of that week.
Mississippi officials announced that if the program is instated that those who receive the forgiveness will be taxed on funds, this according to already standing tax laws in the state. Lawmakers could attempt to amend the tax code in the 2023 session, but it is unclear at this time if that will become an agenda item for the Republican-led supermajority within the Legislature.
Read the full ruling below:
11102022 Student Loan by yallpolitics on Scribd
Sarah Ulmer
