Discharge/Dischargeability

A federal judge in Texas has struck down President Joe Biden’s student loan forgiveness program, declaring it illegal, CNN reported. The lawsuit was filed by the Job Creators Network Foundation in October on behalf of two borrowers who did not qualify for debt relief. Biden’s program was already on hold due a separate legal challenge. The Biden administration has argued that Congress has given the Secretary of Education the power to broadly discharge student loan debt in the HEROES Act, but the Texas federal judge found that the law does not provide the executive branch clear congressional authorization to create the student loan forgiveness program. “The program is thus an unconstitutional exercise of Congress’s legislative power and must be vacated,” wrote Judge Mark Pittman. “In this country, we are not ruled by an all-powerful executive with a pen and a phone.” The Justice Department said that it would appeal the decision. The Biden administration has been banned from canceling any debt since the Eighth Circuit Court of Appeals put an administrative hold on the program on Oct. 21. The appeals court has yet to rule on that lawsuit, and a lower court judge dismissed the lawsuit on Oct. 20, ruling that the states did not have the legal standing to bring the challenge. The Biden administration is facing several other legal challenges to the program. Under Biden’s program, individual borrowers who earned less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 annually in those years are eligible to have up to $10,000 of their federal student loan debt forgiven.