Trump administration was ‘virtually wrong’ in determining it lacked legal authority to cancel student debt broadly, says Biden’s education ministry

President Biden speaks at the White House

President Joe Biden, joined by Secretary of Education Miguel Cardona, addresses student loan debt in the Roosevelt Room of the White House in Washington, DC, August 24, 2022.Alex Wong/Getty Images

  • The Trump administration has concluded that the power to cancel student debt broadly does not exist.

  • Biden’s education department countered this week by calling it “substantially wrong.”

  • On Wednesday, Biden canceled up to $20,000 in student loans for federal borrowers.

It’s no secret that student loan forgiveness has been and will always be hotly contested.

As long as student debt remains a burden to millions of Americans, the question is whether and how the president can legally wipe out some of the crisis, which is now a $1.7 trillion crisis. There was. President Joe Biden’s administration on Wednesday decided the authority was there. Cancel Up to $20,000 in student loans for Pell grant recipients and federal borrowers.

“All of this means that people can finally get out from under the pile of debt, exceed their rent and utility bills, and finally think about buying a home or starting a family or starting a business. ‘, Biden said Wednesday. remarks“By the way, when this happens, the economy as a whole gets better.”

Just before Biden announced this broad bailout, his education department responded Former President Donald Trump concluded in a January 2021 memo while he was in office: The power to cancel student loans for all federal debtors does not exist.

“We believe that the Higher Education Relief and Opportunities Act (“HEROES”) Act of 2003 will implement a targeted loan cancellation program aimed at addressing the economic damage of the COVID-19 pandemic. We decided to give the Commissioner the authority to use it,” Department General Counsel Lisa Brown wrote. tuesday memo“We therefore held that the January 2021 Memorandum was materially erroneous in its conclusion.”

As Brown explained, the HEROES Act tells the Secretary of Education that the statute or regulation that applies to the Student Financial Assistance Program if it determines that a borrower “needs a waiver to avoid being put in a worse position.” to waive or amend the terms. financially” for a national emergency, which in this case is a pandemic.

However, Trump’s Secretary of Education Betsy DeVos said in a memo, “Congress will enact the HEROES Act by enforcing mass cancellations, settlements, discharges, or forgiveness of student loan principal balances, and/or significantly increasing repayment amounts or terms.” It was never intended as the authority to change to,” he ultimately wrote. Claiming broad relief goes beyond Congress.

Brown has called for DeVos’s memo to be formally retracted, but legal debates and litigation are likely as Biden’s student loan forgiveness goes into effect.

Biden himself questions legality of student debt relief

During the campaign, Biden promised to approve $10,000 in student loan forgiveness, but he expressed hesitation when it came to amounts like the $50,000 many Democrats wanted.

“My point is that we understand the impact of debt and it can be debilitating,” Mr. Biden said. Said at City Hall last year. “I’m ready to write off $10,000 of debt, but not $50.” [thousand], because I don’t think I have permission to do that. “

As such, he asked both the Department of Education and the Department of Justice to produce memos assessing their legal authority to cancel student debt broadly. In October 2021, according to a redacted document, the Ministry of Education Circular of notes April 2021 at the earliest.

Just before Biden’s Wednesday announcement, the Justice Department finally produced a memo publicly availableconcludes that Biden’s “targeting relief to individuals who are suffering financial hardship due to COVID-19 and who otherwise meet the requirements of the law” is permissible.

Still, critics of Biden’s plan aren’t convinced.Debossed called Remedy “100% Illegal”, months of pushback Republican lawmakers said Biden had no unilateral power to enact broad bailouts, and that power should rest with Congress.

Even after Biden’s announcement, legal battles are likely to continue. as CNN report In July, a recent Supreme Court ruling limiting the Environmental Protection Agency’s climate change powers could indicate a challenge to student loan relief.

But Democrats have continued to believe their mandate is there to provide relief to millions of borrowers recovering from COVID-19. letter .

“Part of the legal power being used here is to make sure that in a targeted way, it’s the borrowers most at risk of being at risk post-restart, the people who are going to get bailouts. Bharat Ramamurti, deputy head of the National Economic Council, said at a news conference on Wednesday. “The Justice Department will give the Secretary the ability to ensure that pandemics and emergencies do not cause net economic harm to those people.”

Read the original article at business insider