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The U.S. Department of Education has expressed disappointment over a Texas court's decision to block the Biden-approved student loan relief program, saying they believe the plan to be "lawful and necessary."
On Thursday, a federal judge in North Texas ruled that Biden's student loan forgiveness program is "unlawful," saying that the president failed to follow federal procedures allowing for public comment before the policy's announcement.
The decision was the result of a lawsuit filed in North Texas by the Job Creators Network Foundation in October on behalf of two local borrowers who don't qualify for student loan relief.
The ruling by U.S. District Court Judge Mark Pittman, who was appointed by former President Donald Trump, is the latest blow to Biden's student loan forgiveness program, after six GOP-led states previously launched a lawsuit to overturn the program, which temporarily put it on hold.
The program was announced by Biden in August, and eligible borrowers have been able to send their applications in October. It is expected to grant $20,000 in loan debt relief to more than 40 million Americans earning less than $125,000 per year. Low-income students who receive Pell Grants could see up to $20,000 forgiven.
The White House said it has already filed an appeal against the North Texas judge's ruling, saying that the Biden administration would "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 U.S. Department of Education has joined the White House in defense of the program.
"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," a statement from Secretary of Education Miguel Cardona reads.
"We are disappointed in the decision of the Texas court to block loan relief moving forward. Amidst efforts to block our debt relief program, we are not standing down. The Department of Justice has appealed today's decision on our behalf, and we will continue to keep borrowers informed about our efforts to deliver targeted relief."
According to the U.S. Department of Education, more than 26 million student loan borrowers have initiated the process to apply for Biden's student loan forgiveness project. Some 16 million applications have already been approved and sent to loan servicers to be discharged when allowed by the courts.
"Separately, we remain committed to taking other actions to fix longstanding issues in the student loan forgiveness system and hold schools accountable for leaving students with mountains of debt and without the skills and preparation to find good jobs," the statement reads.
"Despite this decision, we will never stop fighting for the millions of hardworking students and borrowers across the country."
This latest court decision in North Texas, together with the previous lawsuit, complicates the state of Biden's student loan forgiveness program, leaving millions of students and borrowers in limbo.
The current moratorium on student loan payments will only be valid until January 1, 2023, after which date borrowers will be expected to start paying up their debt, something they haven't done since March 2020, when at the height of the pandemic Congress passed the CARES Act.
Since then, the legislation was extended three times by Trump and four times by Biden. The president's last extension was also his final, the Biden administration said in August when announcing the student loan forgiveness program.
This leaves students and borrowers who are eligible for student loan forgiveness unsure about how much of their debt they will actually be asked to pay in January if the program remains stuck in the federal courts.
About the writer
Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property ... Read more