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The appeals court rejects Biden’s bid to revive the student debt settlement

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A federal appeals court on Wednesday overturned the ruling of a Texas judge who said President Joe Biden’s plan to cancel hundreds of billions of dollars in student loan debt was illegal.

The New Orleans-based 5th U.S. Circuit Court of Appeals rejected the Biden administration’s request to suspend a judge’s Nov. 10 order to lift the $400 billion student debt forgiveness program in a lawsuit brought by a conservative advocacy group.

The decision by Fort Worth, Texas-based U.S. District Judge Mark Pittman was one of two national decisions that prevented the U.S. Department of Education under Biden from continuing to provide debt relief to millions of borrowers.

The administration has asked the U.S. Supreme Court to similarly revoke an order from the St. Louis-based 8th U.S. Circuit Court of Appeals that, at the request of six Republican-led states, had banned it from withdrawing student loans.

A three-judge panel from the 5th Circuit declined in Wednesday’s brief order to put Pittman’s ruling on hold while the administration appealed its decision, but the court ordered the appeal be expedited.

The panel consisted of two Republican appointees and a judge nominated by former Democratic President Barack Obama. Pittman was appointed by former Republican President Donald Trump.

Biden announced in August that the US government would forgive up to $10,000 in student loans for borrowers earning less than $125,000 a year, or $250,000 for married couples. Students who received Pell Grants benefiting lower-income students will have up to $20,000 of their debt forgiven.

During the 2020 presidential campaign, Biden pledged to help former students in debt. Biden’s program has drawn opposition from Republicans, who have portrayed it as shifting debt from wealthy elites to lower-income Americans.

The Congressional Budget Office calculated in September that the debt cancellation program would cost taxpayers about $400 billion.

About 26 million Americans have applied for student loan forgiveness, and the U.S. Department of Education had already approved 16 million requests by the time Pittman made his ruling.

Pittman ruled in a lawsuit by two borrowers who were partially or completely ineligible for loan forgiveness and who were supported by the Job Creators Network Foundation, a conservative advocacy group founded by Bernie Marcus, a Home Depot co-founder.

The judge said it was irrelevant whether Biden’s plan was good public policy because the program was “one of the largest exercises of legislative power without congressional authority in the history of the United States.”

Pittman wrote that the HEROES Act — a law that provides loan aid to military personnel and on which the Biden administration relied to implement the contingency plan — did not approve the program.

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