Judge Pittman ruled that because the issue of student loan forgiveness is of great “economic and political significance,” and the Department of Education is required to show that it has clear authorization from Congress for the program. Pittman found that the Department did not prove that it had this authorization. He said: “no one can plausibly deny that [the program] is either one of the largest delegations of legislative power to the executive branch or one of the largest exercises of legislative power without congressional authority in the history of the United States.”
The ruling is the result of a lawsuit filed by the Job Creators Network Foundation, a conservative advocacy group. The group filed the complaint on behalf of borrowers who were ineligible to receive full or partial relief from the program, arguing that the administration violated federal procedures by denying borrowers the ability to provide public comment before the program was launched. The group also asserted that the administration lacked proper legislative authority over the program.
The Biden-Harris administration maintains that the Student Debt Relief Plan can be implemented under the Higher Education Relief Opportunities for Students Act (HERO Act, H.R. 1412), which allows the Secretary of Education to waive federal student loan repayments during national emergencies. The administration, which recently signaled that it will continue the COVID-19 Public Health Emergency (PHE) declaration, contends that COVID-19 qualifies as a national emergency.
Department of Education Secretary Miguel Cardona said that the Department is “disappointed” in the ruling. He added that “we are not standing down,” revealing that the Department of Justice has appealed the decision. The loan forgiveness program, for which 16 million applications have been approved for and over 26 million borrowers have applied to without approval yet, will remain in limbo until the Northern District of Texas decision and other lawsuits are resolved.
The moratorium on student loan repayments will only be valid until January 1, 2022. The Biden-Harris administration said in August that the most recent extension was their final, meaning that borrowers will likely be expected to start paying their loans at the end of this year unless President Biden takes action. While the administration has not provided any signs that their decision to halt the moratorium has changed, given the pause on the loan forgiveness program due to legal challenges and the extension of the COVID-19 PHE declaration, it would not be surprising if the moratorium was again extended in the near future.
Please visit AG Study Guide to read our previous coverage of the Student Debt Relief Program and moratorium developments.
