A federal judge in Texas has ruled that President Joe Biden’s plan to relieve billions of dollars of student loan debt is unlawful.
US District Judge Mark Pittman, who was appointed by Donald Trump, has ruled against the White House and in favour of two borrowers in a lawsuit backed by conservative advocacy group the Job Creators Network.
The judge ruled that the HEROES ACT, which gives loan assistance to members of the US military and was used by the Biden administration, did not allow the $400bn student loan plan.
“The Program is thus an unconstitutional exercise of Congress’s legislative power and must be vacated,” Judge Pittman wrote in his 26-page ruling.
The plan had been subject to a string of lawsuits by Republican state attorney generals and right-wing legal groups.
The plan, which was announced in August, would cancel up to $10,000 in federal student loan debts for borrowers making less than $125,000 per year or married couples making $250,000.
Borrowers who received Pell Grants for lower-income students would have had up to $20,000 of their debt cancelled.
The nonpartisan Congressional Budget Office said in September that the plan would eliminate roughly $430bn of the $1.6 trillion dollars owed in federal student loans.
The CBO estimated that around 40 million Americans would have benefitted from the plan.
White House press secretary Karine Jean-Pierre said in a statement on Thursday night that the administration is “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.”
More than 26 million borrowers have already applied for cancelation through the US Department of Education, and 16 million have been approved for relief, according to the White House.
The Education Department “will hold onto their information so it can quickly process their relief once we prevail in court,” Ms Jean-Pierre said. “We will never stop fighting for hardworking Americans most in need – no matter how many roadblocks our opponents and special interests try to put in our way.”
A pandemic-era pause on student loan repayment and interest will expire on 31 December, with payments to resume on 1 January.
