![]() Under both this law and the HEROES Act, “the basic argument is that these authorities are broad grants of discretion to the secretary,” Herrine said.īut these arguments are far from universally recognized. The Biden administration has not invoked this provision so far. The provision, known as (a)(6), “broadly gives the education secretary authority to compromise, waive, or release claims against private parties, including student debtors who owe money directly to the government,” Herrine said. Luke Herrine, a doctoral candidate at Yale Law School who has written extensively about education law, said there is a legal provision separate from the HEROES Act that could be used to justify debt forgiveness. The memo continues, “Specifically, the HEROES Act authorizes the secretary to ‘waive or modify any statutory or regulatory provision applicable to the student financial assistance programs’ if the secretary ‘deems’ such waivers or modifications ‘necessary to ensure’ at least one of several enumerated purposes, including that borrowers are ‘not placed in a worse position financially’ because of a national emergency.”īy taking this legal approach, the Education Department “must demonstrate a plausible connection between the relief offered and the financial burdens created by the pandemic,” said Ryan D. The HEROES Act, the department wrote, “grants the Secretary (of Education) authority that could be used to effectuate a program of targeted loan cancellation directed at addressing the financial harms of the COVID-19 pandemic.” This authority, the legal memo says, can be used to “address the financial harms of such a war, other military operation, or emergency,” such as the COVID-19 pandemic. In a legal opinion, Biden’s Education Department broke with the Trump-era department in advising that the same law could be used not just to pause payments, but also to forgive debt. (Under Biden’s plan, that pause would end in January 2023.) The Donald Trump and Biden administrations repeatedly used the law to pause payments on student loans since the coronavirus pandemic started in early 2020. Rather, his administration drew on the HEROES Act, a law passed after the 9/11 terrorist attacks that allows relief from student loan payments during times of war or national emergency. When Biden announced his plan, he didn’t issue an executive order. The Biden administration’s legal argument One of the political figures who has argued that the president has to work with Congress to enact a debt forgiveness plan is Biden’s close legislative ally, House Speaker Nancy Pelosi, D-Calif. And there are legal obstacles for him doing so on his own, without congressional approval. However, none of this matters unless Biden can get the policy enacted. And the policy attracted criticism from centrists, who said it is poorly timed because it will increase inflationary pressures amid the country’s highest inflation in 40 years. Still, critics on the political right framed the policy as one that shoveled money from lower-income, non-college-educated workers to higher-earning college graduates. ![]() On other occasions, though, candidate Biden proposed a more modest policy in line with what he eventually announced. The White House cited Education Department estimates that nearly 90% of relief dollars would go to Americans earning less than $75,000 a year.īiden’s announced policy was not as aggressive as the complete debt wipeout that some on the left of his party had urged Biden had suggested such a wipeout at least once during the 2020 campaign. The policy announced by the White House would benefit up to 43 million borrowers and cancel the full balance for about 20 million borrowers, according to the administration’s calculations. What Biden plans to doĪbout 20% of Americans have outstanding student loan debts, totaling an estimated $1.6 trillion.īesides the waiver of $10,000 to $20,000, Biden also said the government would cap monthly loan payments for undergraduate loans at 5% of a borrower’s discretionary income, which is half of the current level. ![]() ![]() Here, we’ll look at the confusing legal battleground surrounding student debt relief. But it’s unclear whether such a case could make it to court in the first place. Legal experts say the Biden administration’s legal rationale for waiving student debt may not hold up in court. ![]() 24 Biden announced that his administration will waive student loan debt for qualifying Americans - $10,000 for individuals earning less than $125,000, plus an additional $10,000 for those who had received Pell Grants, which support tuition for lower-income students. President Joe Biden has made a long-awaited decision on how to handle student debt. ![]()
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