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Student Loan Forgiveness Plan In Jeopardy After Court Rules It Illegal: Key Takeaways

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Student Loan Forgiveness Plan In Jeopardy After Court Rules It Illegal: Key Takeaways

(CTN News) – As a result of a recent court ruling in Texas, President Biden’s unprecedented student loan forgiveness initiative has been struck down. This is a major blow to his plan to provide relief for millions of borrowers.

Biden’s program would allow up to 40 million borrowers to receive $10,000 or more in student loan forgiveness. This is if their earnings meet the income guidelines in either 2020 or 2021.

As a result of ongoing legal challenges, no borrower has been able to receive loan forgiveness under the initiative.

Here are the implications of the court’s decision for borrowers.

Biden’s student loan forgiveness plan suffered a serious blow following a court ruling

An organization of conservatives filed a lawsuit on behalf of two borrowers challenging the program on the grounds that the administration did not follow proper procedures for establishing the programs and regulations under the Administrative Procedures Act (APA).

According to the Biden administration, the HEROES Act of 2003 provides the basis for enacting emergency regulations without complying with the APA.

The decision of the U.S. District Court judge in Fort Worth, Texas is different from any other court decision regarding Biden’s student loan forgiveness plan.

The earlier decisions hinged on the question of whether the party who filed the lawsuit had standing to file the lawsuit in the first place. It is necessary for a party to demonstrate a concrete injury sufficiently related to the challenged program in order to establish standing.

In his most recent decision, Judge Mark T. Pittman – an appointee of President Trump – ruled that the program was unconstitutional.

According to Pittman in his written decision, “This country is not ruled by an all-powerful executive with a pen and a phone.”

Rather, the Constitution provides for three distinct and independent branches of government. Pittman described Biden’s plan as “an unconstitutional exercise of Congress’ legislative power.”

The Biden Administration will appeal the decision regarding student loan forgiveness

In response to the court’s ruling, the Biden administration has announced that it will appeal the decision.

“We are disappointed in the decision of the Texas court to block loan relief moving forward,” said U.S. Secretary of Education Miguel Cardona in a statement.

He stated that while attempts are being made to block our debt relief program, we will not back down. We will continue to keep borrowers informed about our efforts to deliver targeted relief in light of today’s decision, which has been appealed by the Department of Justice on our behalf.”

The Department of Justice has filed an appeal against the District Court’s decision regarding the student debt relief program, according to White House Press Secretary Karine Jean-Pierre.

Our opponents – backed by extreme Republican special interests – have sued to prevent millions of Americans from receiving much-needed assistance. The President and this Administration are determined to assist working and middle-class Americans in getting back on their feet.”

It may be difficult to appeal the student loan forgiveness ruling

Experts in student loan law have criticized the District Court’s decision, claiming that the judge erred by failing to address the issue of standing.

With its appeal, the Biden administration will take the case to the 5th Circuit Court of Appeals, one of the most conservative federal appeals courts in the country.

It has issued some recent rulings (such as finding that the Consumer Financial Protection Bureau’s funding structure violates the Constitution) that suggest appellate judges may view Biden’s student loan forgiveness program with considerable skepticism.

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