On Friday morning the federal student loan forgiveness website was replaced with a message explaining that the program is currently blocked and that the administration is seeking to overturn the orders.
This came the morning after a Trump-appointed federal judge in Texas blocked the embattled student loan forgiveness effort.
The decision from Justice Mark Pitman begins with a broad opinion that the Biden Administration lacks the power to do this at all and that such power only resides with congress. But after that opening salvo it details the plaintiffs and their specific complaint. Their complaint is that they did not get a chance to make a public comment on the proposal and that they lack eligibility to some parts of the forgiveness, either because their debt is privately held or because they did not receive a Pell Grant, the requirement for receiving the full $20k, which is a very different issue than whether the president has the authority to do it at all.
The federal government uncontroversially lacks the ability to discharge privately held loans, so even a public comment period would be unlikely to grant that plaintiff much relief, although that is not necessarily a reason to ignore good faith objections.
Unfortunately, the main litigant in the case is an organization called the Job Creators Network Foundation, which is explicitly a conservative advocacy group created by one of the founders of Home Depot. An organization which also received PPP loan forgiveness.
One of the things that has caused other student loan forgiveness cases to be dismissed, and one of the main points the Biden administration makes, is an issue of standing. Standing requires legal proof that you are being harmed and the President’s administration maintains that no one has standing because no one is being harmed. Laurence Tribe, a Harvard Law professor, told CNBC that he could not believe that the judge issued this decision without considering standing, but there is a section where the judge addresses this. In a section on this issue, the justice cites a somewhat incomparable case brought against the city of Jacksonville, FL.
Ultimately the Dept. of Education is still convinced that it will forgive student loan debt, but seems to have decided that continuing to accept new loan forgiveness applications with two pending lawsuits wasn’t the look they wanted to present.