Biden Doubles Down On Student Loan Cancellation Despite Federal Ruling

Biden Doubles Down On Student Loan Cancellation Despite Federal Ruling

The Biden administration doubled down on its move to cancel student debt for millions of borrowers after a federal judge nixed the controversial program.

U.S. District Judge Mark Pittman in the Northern District of Texas declared the debt cancellation plan illegal on Thursday evening in response to a lawsuit filed by the Job Creators Network Foundation’s Legal Action Fund. The student loan cancellation plan would eliminate $10,000 in debt for borrowers earning under $125,000 per year and $20,000 for students who attended college using Pell Grants.

White House Press Secretary Karine Jean-Pierre said in a statement that an appeal has already been filed. “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,” she remarked. “We will never stop fighting for hardworking Americans most in need — no matter how many roadblocks our opponents and special interests try to put in our way.”

The Department of Education has received applications from 26 million individuals seeking student loan cancellation, of which 16 million have been approved. Jean-Pierre added that the agency will “hold onto their information so it can quickly process their relief once we prevail in court.”

The complaint from the Job Creators Network Foundation, a conservative advocacy group, contends that the student loan elimination policy violated the notice-and-comment processes mandated by the Administrative Procedure Act. Other parties, including multiple conservative state attorneys general, have likewise filed suit over the debt cancellation effort.

Job Creators Network Foundation President Elaine Parker celebrated the judge’s decision in a statement provided to The Daily Wire. “The court has correctly ruled in favor of our motion and deemed the Biden student loan program illegal,” she said. “The judge criticized the Biden administration program, calling it ‘one of the largest exercises of legislative power without congressional authority in the history of the United States.’ This ruling protects the rule of law which requires all Americans to have their voices heard by their federal government.”

The White House has also extended the pause on federal student loan repayment to January 2023 and will permit borrowers with undergraduate loans to cap payments at 5% of monthly income. One estimate from the Congressional Budget Office predicts that the overall cost of the debt elimination could reach $400 billion, with another $20 billion incurred by the extended pause on repayments.

“This attempted illegal student loan bailout would have done nothing to address the root cause of unaffordable tuition: greedy and bloated colleges that raise tuition far more than inflation year after year while sitting on $700 billion in endowments,” Parker continued. “We hope that the court’s decision today will lay the groundwork for real solutions to the student loan crisis.”

Though President Joe Biden claimed that “not a dime” of the debt cancellation will benefit the top 5% of earners, data have indicated that student loan forgiveness largely helps individuals who are poised to earn the most from their degrees, as graduate-level education is often necessary for the most lucrative professions. A report from the Brookings Institution observed that one-third of student debt is owed by the wealthiest 20% of households, while only 8% is owned by the bottom 20%.

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