A federal judge in Texas on Thursday blocked President Joe Biden's student loan forgiveness plan, ruling in favor of a conservative advocacy group that sued to stop the program.

As of Friday morning, a notice on the Student Aid portal's website says that the Department of Education has temporarily stopped taking applications as challenges to the policy plays out in court.


What You Need To Know

  • A federal judge in Texas has blocked the Biden adminstration’s loan forgiveness plan, calling it "an unconstitutional exercise of Congress’s legislative power"

  • As of Friday morning, a notice on the Student Aid portal's website says that the Department of Education has temporarily stopped taking applications as challenges to the policy plays out in court

  • The administration's proposal would forgive $10,000 in debt for qualified borrowers, and $20,000 in relief to Pell Grant recipients

  • President Biden announced last week that 16 million Americans have already had their applications approved, though the cancellation won’t appear on their accounts while a legal challenge from Republican-led states plays out in court

"Courts have issued orders blocking our student debt relief program," the notice reads. "As a result, at this time, we are not accepting applications. We are seeking to overturn those orders."

The notice says that it is holding applications for anyone who has already applied. President Biden announced last week that nearly 26 million Americans have applied to student loan relief so far and 16 million have already had their applications approved.

The Biden administration’s loan forgiveness program seeks provide federal student loan debt relief to borrowers individually making less than $125,000, or jointly making less than $250,000; as well as borrowers with loans that are not commercially held. If a borrower qualifies, the program would forgive $10,000 in debt for qualified borrowers, and $20,000 in relief to Pell Grant recipients.

In his ruling, U.S. District Court for the Northern District of Texas Judge Mark Pittman, an appointee of former President Donald Trump, declared the policy unlawful, calling it "an unconstitutional exercise of Congress’s legislative power" that "must be vacated.

“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” Pittman wrote. “Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government.”

“Whether the program constitutes good public policy is not the role of this court to determine,” Pittman wrote. “Still, no one can plausibly deny that it 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 law draws authority from the 2003 Heroes Act, which allows the Secretary of Education "to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies."

The lawsuit, filed by the Job Creators Network Foundation on behalf of two borrowers who did not fully or in-part qualify for the loan forgiveness program, alleged that the federal government violated notice-and-comment requirements, as well as argued that the administration didn’t have the authority to implement the program.

Pittman disagreed with the notice-and-comment argument. However, he found that the Department of Education — which would manage the loan forgiveness program — did not have “clear congressional authorization” under the HEROES Act, then agreeing that the proper course of action would be to vacate the program.

The Biden administration has said about 40 million people could be eligible for student debt relief.

Late Thursday night, the White House registered its disagreement with the court's ruling and pledged to 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," White House Press Secretary Karine Jean-Pierre said in a statement.

"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," Jean-Pierre added.

Spectrum News' Austin Landis contributed to this report.