A Texas federal judge has struck down President Joe Biden’s student loan forgiveness program, declaring it illegal.
The lawsuit was filed by a conservative group, the Job Creators Network Foundation, in October on behalf of two borrowers who did not qualify for debt relief.
Biden’s program was already on hold due to a separate legal challenge.
The Biden administration has argued that Congress gave the Secretary of Education the power to largely discharge student loan debt in a 2003 law known as the HEROES Act.
But the Texas federal judge ruled that the law did not provide the executive branch with clear authorization from Congress to create the student loan forgiveness program.
“The program is therefore an unconstitutional exercise of the legislative power of Congress and must be struck down,” wrote Judge Mark Pittman, who was appointed by then-President Donald Trump.
“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” he continued.
The Justice Department said Thursday it would appeal the decision, and White House press secretary Karine Jean-Pierre said in a statement that “we strongly disagree with the court’s decision. of the district on our student debt relief program”.
“For the 26 million borrowers who have already provided the Ministry of Education with the information needed to be considered for debt relief – 16 million of whom have already been approved for debt relief – the Ministry will retain their information so we can quickly process their relief once we win in court,” Jean-Pierre said.
The Biden administration has been barred from canceling any debt since the U.S. 8th Circuit Court of Appeals suspended the program Oct. 21.
The appeals court has yet to rule on the lawsuit, brought by six Republican-led states. A lower court judge dismissed the lawsuit on Oct. 20, ruling that the states did not have the legal standing to bring the challenge.
The Biden administration faces several other legal challenges to the program. Supreme Court Justice Amy Coney Barrett denied two separate applications to challenge the program.
Under Biden’s program, individual borrowers who made less than $125,000 in 2020 or 2021 and married couples or heads of households who made less than $250,000 a year in those years can get up to to $10,000 of their federal student loan debt.
If an eligible borrower also received a Federal Pell Grant while enrolled in college, they are eligible for debt forgiveness of up to $20,000.
In the case on Thursday, one plaintiff was ineligible for the student loan forgiveness program because her loans are not held by the federal government and the other plaintiff is only entitled to $10,000 in debt relief because he did not receive a Pell grant.
They argued that they could not express their disagreement with the program’s rules because the administration had not put it through a formal notice-and-comment rule-making process under the Privacy Act. the administrative procedure.
“This decision protects the rule of law that 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 Thursday.
The advocacy group was founded by Bernie Marcus, a major Trump donor and former CEO of Home Depot.
Federal student loan payments have been suspended since March 2020 due to a pandemic-related benefit. They should resume in January.
This story has been updated with additional information.