Appeals court rejects Biden’s offer to revive student debt plan

A federal appeals court on Wednesday refused to stay the ruling by a Texas judge who said President Joe Biden’s plan to cancel hundreds of billions of dollars in student loan debt was illegal.

The New Orleans-based US Court of Appeals for the Fifth Circuit has denied the Biden administration’s request to stop a judge’s Nov. 10 order that struck down the $400 student debt relief program. billion in a lawsuit brought by a conservative advocacy group.

The decision by US District Judge Mark Pittman, based in Fort Worth, Texas, was one of two nationwide that has prevented the US Department of Education under Biden from going ahead with the grant debt relief to millions of borrowers.

The administration has asked the US Supreme Court to similarly strike down an order by the St. Louis-based US Court of Appeals for the 8th Circuit that, at the request of six Republican-led states, had prohibited him from paying off student loans.

A three-judge panel for the Fifth Circuit in Wednesday’s brief order declined to stay Pittman’s ruling while the administration appealed its decision, but the court ordered the appeal to be heard expeditiously.

The panel included two Republican appointees and a judge nominated by former Democratic President Barack Obama. Pittman was appointed by former Republican President Donald Trump.

Biden announced in August that the US government would forgive up to $10,000 in student loan debt for borrowers earning less than $125,000 a year, or $250,000 for married couples. Students who received Pell Grants to benefit low-income college students will have up to $20,000 of their debt cancelled.

During the 2020 presidential campaign, Biden promised to help indebted college alumni. Biden’s program has drawn opposition from Republicans, who have portrayed it as shifting the debt burden from wealthy elites to low-income Americans.

The Congressional Budget Office estimated in September that implementing the debt forgiveness program would cost taxpayers about $400 billion.

About 26 million Americans have applied for student loan forgiveness, and the US Department of Education had already approved 16 million applications when Pittman issued his ruling.

Pittman ruled in a lawsuit brought by two borrowers who were partially or fully ineligible for loan forgiveness and who were backed by the Job Creators Network Foundation, a conservative advocacy group founded by Home Depot co-founder Bernie Marcus.

The judge said it was irrelevant whether Biden’s plan was good public policy because the program was “one of the largest exercises of legislative power without congressional authority in the history of the United States.”

Pittman wrote that the HEROES Act, a law that provides credit assistance to military personnel and which the Biden administration relied on to enact the relief plan, did not authorize the program.