The legality of the student loan plan rests on the pandemic law of 2003
By MARK SHERMAN, Associated Press
WASHINGTON (AP) — The Biden administration ties its power to forgive student debt to the coronavirus pandemic and a 2003 law to provide relief to members of the military. Legal challenges are expected.
Among those skeptical of the administration’s ability to act alone, without new legislation, were once President Joe Biden himself and House Speaker Nancy Pelosi.
But in a legal opinion released Wednesday, the Justice Department said the HEROES Act of 2003 gives the administration “absolute authority” to reduce or eliminate student debt during a national emergency, “when important actions with potentially important consequences are often necessary”. “
The law was passed with overwhelming bipartisan support at a time when US forces were fighting two wars, in Afghanistan and Iraq. It gives the Secretary of Education the power to override rules for student financial aid programs in times of war or national emergency.
Former President Donald Trump declared a national emergency in 2020 due to the pandemic, and it remains in effect.
But neither Trump nor Biden, until the president’s announcement on Wednesday, had attempted to erase so much student debt in one go.
The Justice Department’s legal rationale appeared to anticipate criticism that large-scale debt cancellation could run counter to Supreme Court rulings, including a June ruling limiting the administration’s ability to combat climate change.
In that case, the court said that when dealing with such “major issues,” the administration must indicate clear authorization from Congress when asserting new power over a significant part of the economy.
The rationale for debt forgiveness “seems to be going well – perhaps inadvertently – a major issues doctrine challenge as opinion seems to suggest that the agency could forgive all student loans for everyone due of the pandemic” if the head of the agency deemed it necessary, Chris Walker, a professor of law at the University of Michigan, wrote on Twitter.
But Abby Shafroth, an attorney at the National Consumer Law Center, said a challenge to the loan forgiveness plan could fail in several ways, including the specific reference to national emergencies in the 2003 law.
The Trump and Biden administrations have previously relied on the HEROES Act to suspend loan repayments during the pandemic and, in Biden’s case, revise a student debt forgiveness program for public servants, Shafroth said.
“Today’s action is significant, but not different in nature,” she said.
A separate issue may be finding someone who is harmed by the administration’s action and who has standing to sue, she said.
The Job Creators Network, which promotes conservative economic policies, said it was considering legal action to try to block Biden’s plan.
“This executive overreach shifts taxpayer dollars from hard-working ordinary Americans and small businesses to disproportionately higher incomes with college degrees,” said Alfredo Ortiz, the group’s president and chief executive. “It does nothing to solve the underlying problem of the exorbitant costs of a college education. In effect, it rewards colleges for making education unaffordable and entrenches the failing status quo.
An Education Department memo, produced in the final days of the Trump administration, concluded there was no authority to write off debt on a broad basis.
The department has never invoked the statute, or any other statute, “for blanket or mass cancellation, compromise, discharge, or remission of student loan principal balances,” wrote then-department attorney Reed Rubinstein. of Education, in January 2021.
The matter has been under consideration for about 18 months, Lisa Brown, the Department of Education’s lead attorney, wrote in a separate memo released Wednesday and called on Education Secretary Miguel Cardona to rescind Rubinstein’s note.
Pelosi also reversed course. In Las Vegas on Tuesday, Pelosi said she “didn’t know what — what authority the president had to do this. And now, clearly, it seems he has the power to do so.
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