- Trump’s administration concluded the authority does not exist to cancel student debt broadly.
- Biden’s Education Department pushed back this week, saying that is “substantively incorrect.”
- On Wednesday, Biden canceled up to $20,000 in student debt for federal borrowers.
It’s no secret that student-loan forgiveness has been, and continues to be, hotly contested.
For as long as student debt has been a burden for millions of Americans, there has been the question of how, and if, a president can legally wipe out some of what is now a $1.7 trillion crisis. President Joe Biden’s administration on Wednesday decided that the authority is there, canceling up to $20,000 in student debt for Pell Grant recipients and federal borrowers.
“All of this means people can start to finally crawl out from under that mountain of debt to get on top of their rent and their utilities, to finally think about buying a home or starting a family or starting a business,” Biden said during Wednesday remarks. “And, by the way, when this happens, the whole economy is better off.”
Right before Biden announced this broad relief his Education Department responded to the conclusion former President Donald Trump made in a January 2021 memo during his time in office: that the authority does not exist to cancel student debt for all federal borrowers.
“We have determined that the Higher Education Relief Opportunities for Students (“HEROES”) Act of 2003 grants the Secretary authority that could be used to effectuate a program of targeted loan cancellation directed at addressing the financial harms of the COVID-19 pandemic,” the department’s General Counsel Lisa Brown wrote in a Tuesday memo. “We have thus determined that the January 2021 memorandum was substantively incorrect in its conclusions.”
As Brown explained, the HEROES Act gives the Education Secretary the authority to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” if the secretary finds waivers are necessary to ensure borrowers would not be placed in a “worse position financially” due to a national emergency, which in this case, is the pandemic.
However, Trump’s Education Secretary Betsy DeVos wrote in her memo that “Congress never intended the HEROES Act as authority for mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify repayment amounts or terms,” ultimately arguing any broad relief is overstepping Congress.
While Brown requested DeVos’ memo be formally rescinded, there are still likely to be legal arguments down the road, and even lawsuits, as Biden’s student-loan forgiveness becomes implemented.
Biden himself has questioned the legality of student-debt relief
On the campaign trail, Biden pledged to approve $10,000 in student-loan forgiveness, but when it comes to amounts like $50,000 — which many Democrats were pushing for — he expressed hesitancy.
“My point is: I understand the impact of debt, and it can be debilitating,” Biden said during a town hall last year. “I am prepared to write off the $10,000 debt but not $50 [thousand], because I don’t think I…
Read More: Trump Was ‘Substantively Incorrect’ on Student-Loan Forgiveness: Ed. Dept