On Wednesday, a federal appeals court declined to overturn a Texas judge’s decision that President Joe Biden’s proposal to forgive hundreds of billions of dollars in student loan debt was illegal.
In a case brought by a conservative advocacy organization, the 5th U.S. Circuit Court of Appeals in New Orleans denied the Biden administration’s plea to stay a judge’s ruling invalidating the $400 billion student debt relief scheme on November 10.
One of two decisions made nationwide by U.S. District Judge Mark Pittman, who is headquartered in Fort Worth, Texas, stopped the U.S. Department of Education under Biden from awarding debt relief to millions of students.
The administration has urged the U.S. Supreme Court to reverse a decision by the 8th U.S. Circuit Court of Appeals in St. Louis that had prohibited it from canceling student loans at the request of six Republican-led states.
According to a policy announced by Biden in August, borrowers who earn less than $125,000 a year, or $250,000 for married couples, would have up to $10,000 in student loan debt forgiven by the federal government. For individuals who received Pell Grants, which were designed for college students from lower-income households, up to $20,000 of student debt will be canceled.
Biden pledged during the 2020 presidential campaign to assist former college students who were burdened with debt. Republicans have opposed Biden’s plan, arguing that it will shift debt burdens from rich elites to lower-income Americans.
The cost of the debt forgiveness scheme, according to a September estimate by the Congressional Budget Office, would be $400 billion for the taxpayers.
In total, 26 million Americans have asked for student debt forgiveness, and by the time Pittman, a Trump appointee and former Republican, announced his decision, the U.S. Department of Education had granted 16 million of those requests.