Biden Student Loan Forgiveness Canceled: FAQs Answered

What legal reasoning was Biden relying on?

Biden had crafted his program by arguing he had the power to do so thanks to a 2003 law passed by Congress called the Higher Education Relief Opportunities for Students Act (HEROES Act). That law empowered the education secretary to waive or modify any federal student loan programs as deemed necessary “in connection with a war or other military operation or national emergency.” Former president Donald Trump had formally declared the COVID-19 pandemic a national emergency in March 2020.

But Pittman decided that the case mirrored the “major questions doctrine” from a Supreme Court case in June between West Virginia and the US Environmental Protection Agency — wherein the court said that a federal agency needs to be able to point to “clear congressional authorization” when trying to regulate an issue of major political or economic significance — and that the HEROES Act wasn’t enough.

He said that the 2003 law didn’t mention anything about forgiving loans, that the administration hadn’t shown a connection between the program and the pandemic emergency (which, the judge noted, Biden had told 60 Minutes was “over”), and that because the Education Department hadn’t previously pointed to the HEROES Act in order to cancel student loans, the fact that they were doing so now was probably evidence that it didn’t authorize them to do so.

With this decided, the judge then ordered the whole program be struck down and not just put on pause. “First… it is a complete usurpation of congressional authorization implicating the separation of powers required by the Constitution,” Pittman said. “Second, the Program does not require a significant administrative winddown period, as loan forgiveness has not started.”

What made this legal challenge different from the others?

Biden’s program had already been put on a temporary pause last month thanks to an injunction from the 8th US Circuit Court of Appeals, which is weighing an appeal from a group of Republican states. However, that appeals court hadn’t struck down the program entirely, and the administration was continuing to accept applications from borrowers in the meantime.

What makes this decision different is that Pittman determined that the plaintiffs had legal standing to bring a challenge to the program in the first place. Others who have tried to fight the law in court have failed at the first hurdle after judges ruled they couldn’t prove they were harmed by it.

But this new challenge was brought by Myra Brown and Alexander Taylor, two people with student loans whose legal challenge was backed by a conservative advocacy group. Brown didn’t like that she didn’t qualify for forgiveness because her loans were through private lenders and not the government, while Taylor wasn’t happy that he could only qualify for $10,000 and not $20,000 in relief as he didn’t receive a Pell Grant.

The judge decided that their situations both amounted to some form of harm — namely, “a concrete interest in having their debts forgiven to a greater degree” — meaning they had standing to sue.

What happens next?

The ruling means the program can’t — for now — move forward.

Indeed, the morning after the ruling the website where people registered for forgiveness was already announcing that the plan had been blocked.

But the Biden administration has already appealed the decision to the 5th Circuit Court of Appeals, where Texas sits and which has a reputation for being the most conservative in the country.

Whatever happens there, it’s likely that a Supreme Court challenge will follow. Justice Amy Coney Barrett has already refused two previous challenges that lower courts had rejected, but the justices have yet to fully examine the program.