Federal Judge in Texas Blocks Loan Forgiveness Plan

• In late October, a federal appeals court temporarily blocked Biden's relief plan, but this is the first instance of a federal district court vacating the program.
• Judge Mark Pittman of the U.S. District Court for the Northern District of Texas ruled that the Education Department didn't have the authority to erase large amounts of federal student debt.
• The future of Biden's debt forgiveness plan remains murky as the pause on student loan payments nears its end.

President Joe Biden's student loan debt forgiveness plan has been thrown another hurdle to overcome before borrowers can receive debt relief.

Judge Mark Pittman of the U.S. District Court for the Northern District of Texas vacated the president's plan to dispel up to $20,000 in federal student loan debt for most borrowers. The Department of Justice quickly appealed the court's Thursday decision to the conservative-leaning 5th Circuit Court of Appeals.

Ultimately, Pittman's decision came down to the belief that the Department of Education (ED) does not have the authority to authorize widespread student loan debt forgiveness.

"In this country, we are not ruled by an all-powerful executive with a pen and a phone," Pittman, an appointee of former Republican President Donald Trump, wrote in the conclusion to his order. "Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government."

His decision goes against rulings other district courts have made in similar challenges to the program.

The 8th U.S. Circuit Court of Appeals did, however, temporarily block the program in late October, granting a motion from six Republican-led states suing ED over the plan. The stay has stopped ED from discharging any debt until the court makes a ruling on a preliminary injunction.

Unlike most other courts and judges, Pittman ruled that the Higher Education Relief Opportunities for Students (HEROES) Act does not allow ED to forgive debt en masse. The law allows the department to "waive or modify" provisions related to Title IV funds, which encompasses the federal student loan program, during a national emergency. The COVID-19 pandemic is the national emergency in this case.

Pittman, however, stated in his opinion that the HEROES Act does not give ED the "clear congressional authorization" to carry out Biden's plan.

Additionally, because the price tag of the forgiveness program is expected to be upwards of $400 billion, the "major questions doctrine" applies in this case, he ruled.

His ruling stressed Biden and ED's failure to offer a "notice and comment" period for this program. The two plaintiffs in the case, backed by conservative advocacy group the Job Creators Network Foundation, argued that they never had the chance to voice their opinions on the program and advocate for a plan that would offer them more forgiveness.

Actions under the HEROES Act are exempted from "notice and comment." But because the judge stated the HEROES Act doesn't apply, Pittman ruled in favor of the plaintiffs.

We believe strongly that the Biden-Harris Student Debt Relief Plan is lawful and necessary to give borrowers and working families breathing room as they recover from the pandemic and to ensure they succeed when repayment restarts.

— Secretary Miguel Cardona (@SecCardona) November 11, 2022

There is no timeline for when the 5th Court of Appeals will hear the case for an appeal. The suit may eventually work its way up to the U.S. Supreme Court.

The pause on federal student loan payments is slated to end on Jan. 1.