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Student borrowers demand debt cancellation outside the White House

Federal student loan borrowers rally outside the White House on August 25, 2022. (Photo: Craig Hudson for The Washington Post via Getty Images)

DOJ Appeals as Trump Judge Blocks Student Debt Cancellation With 'Farcical' Ruling

"A federal judge conspired with right-wing politicians and corrupt corporations to block life-changing student debt relief for tens of millions of families," said one campaigner.

Jake Johnson

The Justice Department filed an appeal Thursday after a Trump-appointed federal judge in Texas blocked the Biden administration's student debt cancellation program nationwide, declaring it "unlawful" on grounds that legal experts criticized as laughable.

The 26-page ruling by Mark Pittman of the U.S. District Court for the Northern District of Texas finds that the two plaintiffs who brought the case with the backing of the Job Creators Network Foundation—an affiliate of a right-wing, billionaire-funded business trade group—have standing to sue over the debt cancellation program because the Biden administration didn't allow a public comment period before moving ahead with the plan.

A public comment period is not required under the legal authority the Biden administration used to justify the cancellation of $10,000 to $20,000 in federal student loan debt for most borrowers, but Pittman noted that the plaintiffs dispute that legal authority.

"Because the court must 'assume, for purposes of the standing analysis, that [plaintiffs are] correct on the merits of [their] claim that the [program] was promulgated in violation of the [Administrative Procedure Act],' plaintiffs have successfully alleged the deprivation of a procedural right," wrote Pittman, a founding member of the Tarrant County Federalist Society.

Neither Myra Brown nor Alexander Taylor, the two plaintiffs in the case, are eligible for full student debt relief under the Biden administration's plan—Brown has commercial loans and Taylor did not receive a Pell Grant. The Intercept reported earlier this week that Brown "has herself been a beneficiary of debt cancellation, in the form of a Paycheck Protection Program business loan worth over twice the maximum amount covered under Biden's program."

Pittman's reasoning conflicts with rulings in previous cases in which judges—including one appointed by George W. Bush—dismissed lawsuits against the debt cancellation plan over plaintiffs' failure to demonstrate standing, which requires them to prove direct injury or harm.

"Today, a federal judge conspired with right-wing politicians and corrupt corporations to block life-changing student debt relief for tens of millions of families," said Mike Pierce, executive director of the Student Borrower Protection Center (SBPC). "In courts across the country, dark money-backed legal challenges are growing like weeds. The Biden administration must use this decision as an opportunity to make it clear that the student loan system will remain shut off as long as these partisan legal challenges persist. Student loan borrowers should never be sacrificed as pawns in Republicans' political games."

Shortly after Pittman handed down his ruling, White House Press Secretary Karine Jean-Pierre said in a statement that "we strongly disagree with the District Court's ruling on our student debt relief program and the Department of Justice has filed an appeal."

"The president and this administration are 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," said Jean-Pierre.
 
"For the 26 million borrowers who have already given the Department of Education the necessary information to be considered for debt relief—16 million of whom have already been approved for relief—the department will hold onto their information so it can quickly process their relief once we prevail in court," she added.

Pittman's decision came weeks after the conservative-dominated Eighth Circuit Court of Appeals issued a one-page order pausing the debt cancellation program in response to a challenge brought by Republican attorneys general, leaving millions of borrowers in limbo.

Persis Yu, deputy executive director and managing counsel at SBPC, said late Thursday that "the devastating result" of Pittman's ruling "is that tens of millions of student loan borrowers across the country now have their vital debt relief blocked as a result of this farcical and fabricated legal claim."

"Today's decision is a tragic reminder of the tightening grip that special interests have on our legal system," Yu added. "It is disappointing to see this judge pervert the law in order to achieve a politically motivated outcome. The Biden administration cannot now resume payments on January 1st. It must use all of its tools to fight to ensure that borrowers receive the debt relief they need."

Writing for The Guardian on Friday, Debt Collective co-founder Astra Taylor noted that the Biden administration's debt relief plan likely motivated many young voters to turn out in the midterms, helping Democrats stave off the predicted "red wave."

"Looking ahead, there's no doubt student debt relief will play an outsized role in the December 6 Georgia runoff—a contest that may determine the balance of power in the Senate," Taylor wrote, urging President Joe Biden to "cancel student debt tomorrow and let [Republican candidate Herschel] Walker deal with the fallout."

"Biden has the power to make this happen," Taylor argued. "As things stand, his debt relief plan is stalled by bad-faith litigation. While the president has rightly blasted the Republicans behind these lawsuits, the real story is more complicated. Biden could have directed the education secretary to cancel people's debts using the 'compromise and settlement' authority granted in the Higher Education Act of 1965, but instead his administration invoked a different and more limited legal authority."

"If Biden allows Republicans and billionaires to sabotage student debt cancellation without a fight, he risks breaking the fragile trust that has only just been built with younger voters," Taylor warned. "Student debt cancellation can be one of Biden's signature victories, and a catalyst for a reinvigorated Democratic Party, or a self-inflicted failure—an empty promise that risks demoralizing and demobilizing the demographic on which the future of the Democratic Party, and arguably democracy itself, depends."


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