On Thursday, a federal judge in Texas struck down President Biden’s student-debt-relief plan, leaving the 26 million borrowers who have already applied for cancellation in limbo just months before payments are set to resume, the Washington Post reports. The Biden administration swiftly appealed. “We strongly disagree with the District Court’s ruling,” White House press secretary Karine Jean-Pierre said in a statement, adding 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.”
Republicans have been attempting to block the debt-relief program since it was announced in August with attorneys backed by conservative advocacy groups filing lawsuits in multiple states, arguing the plan is unlawful. The October suit that brought on Thursday’s ruling was filed by the right-wing Job Creators Network Foundation on behalf of two Texas plaintiffs who claim they were harmed by the program because they didn’t qualify for relief. One plaintiff claimed he was harmed because he didn’t qualify for the full $20,000 in debt relief (per the plan’s strictures, only Pell Grant recipients are eligible for that amount, while all other federal borrowers making less than $125,000 are eligible for $10,000); the other, the business owner Myra Brown, argued that she was harmed because she had taken out private loans and therefore didn’t qualify for the program. The Intercept reports that Brown has already been a beneficiary of debt cancellation, having had $47,996 of her $48,000 business loan canceled via the Trump-era Paycheck Protection Program, which also afforded exorbitant relief to prominent student-debt-cancellation detractors such as Marjorie Taylor Greene, who reportedly had over $180,000 in PPP loans canceled. Both plaintiffs in the case have argued Biden did not allow borrowers to voice concerns about relief eligibility prior to the program’s rollout, while the Trump-appointed judge in the case, Mark Pittman, called the program a “complete usurpation” of congressional authority by Biden.
“I like to think of this lawsuit as, like, the toddler problem. If I can’t have it, you can’t have it either,” Persis Yu, managing counsel at the Student Borrower Protection Center, told NPR of the lawsuit, which isn’t the only one that could potentially hold water. In late October, a federal appeals court temporarily blocked the program so it could consider a suit filed by six states arguing some state-based loan servicers would be adversely affected should borrowers consolidate their privately held loans and qualify for debt cancellation; while that suit was dismissed by a Missouri district court, the plaintiffs have appealed it. Meanwhile, the Biden administration’s appeal process could reportedly take weeks before a resolution is reached. Prior to Thursday’s ruling, the Education Department — which has now taken down its debt-relief application — said it was on track to approve cancellation for 16 million of the borrowers who had applied.