Student Loan Forgiveness Review Could Cause Student Loans To Be Canceled, But There Is A Problem


Will your student loans be canceled after they are reviewed by the US Department of Education?

Here is what you need to know.

Student loans

President Joe Biden has called on the US Department of Education to conduct a legal review of the president’s power to write off student loan debt. The exam may contain at least some of the following:

The Education Department, headed by U.S. Secretary of Education Miguel Cardona, is expected to send the legal review to the president within weeks. “He will review that legal authority,” White House chief of staff Ron Klain said in reference to Biden. “He will look at the policy issues around this, and he will make a decision.”

Student loan cancellation: here’s the problem

While a legal review of student loans and student loan cancellation is the next logical step, there is one glaring problem: Why is the US Department of Education conducting this legal review? The Department of Education surely has highly skilled and accomplished lawyers and policy experts who fully understand the legal and public policy components of student loan cancellation. So it’s not about understanding the complexities of the issue or being able to interpret the law. Under the Trump administration, for example, the Education Department also spoke out on large-scale student loan forgiveness. The education department released a legal note that determined that a president does not have the unilateral power to order student loan cancellation. Today, the Education Department could accept or reject its predecessor’s non-binding note, or come to an alternative conclusion.

The bigger question, however, is not what the Education Department thinks – which, like the president, is part of the executive branch of the federal government. The question is what Congress think, and more precisely, What did Congress mean when it passed the Higher Education Act of 1965? Section 432 (a) of the Higher Education Act of 1965 grants the United States Secretary of Education the power to “modify, compromise, waive or release any right, title, claim, privilege or demand, whatsoever. in either the right way of redemption. Based on this provision, Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) argue that it is indisputable that the President (through the Secretary to the ‘Education) can cancel student loans for all student borrowers by an executive. order. This provision is the main reason why Democrats plan to cancel up to $ 50,000 in student loans. Schumer even suggested to the Senate that Congress can cancel student loans more than once. Opponents of student loan cancellation say Congress never intended to grant the president unlimited, uncontrolled power to write off everyone’s student loan debt – and if Congress l had wanted, Congress would have written it explicitly into the text of the legislation, which Congress did not.

Student loan forgiveness: this should happen instead

When Congress drafted the Higher Education Act of 1965, it is unlikely that any member of Congress contemplated that one day 45 million student borrowers would collectively owe $ 1.7 trillion in student debt. That said, at a minimum, Congress has scheduled the president (through the Department of Education) to write off at least some of the student loan debt. Biden acted on this premise. For example, Biden canceled $ 2.3 billion in student loans last month. First, Biden canceled $ 1 billion in student loans for 72,000 student borrowers and second, it canceled an additional $ 1.3 billion in student loans for 41,000 borrowers with total and permanent disability. Biden carried out a targeted and piecemeal student loan cancellation, rather than a one-time, large-scale student loan cancellation. Biden’s opinion is that he doesn’t think he has the unilateral power – without any further authorization from Congress – to order the cancellation of student loans, even if he wanted to. Biden wants to immediately cancel $ 10,000 in student loans and wants Congress to pass the relevant student loan cancellation legislation.

The Ministry of Education may seem like the right choice to conduct a legal review, as the cancellation of student loans is within its purview. However, the exercise required is more of a legislative drafting analysis and constitutional interpretation. While the Department of Education can certainly conduct a policy review and provide advice on the law, it seems more appropriate that any of the following may be better suited to conduct the legal review:

  • Legal Adviser to the White House;
  • the Attorney General of the United States; or
  • an independent presidential commission made up of jurists and jurists.

Otherwise, it would be helpful to learn more from a bipartisan congressional task force, committee, or subcommittee that can interpret what Congress intended in its drafting of the law. higher education in 1965.

Student loan cancellation: next steps

Should there be a legal review of student loan cancellation? Yes. That said, a soft legal review can only go so far. No matter what the legal review determines, only Biden will decide whether or not to prosecute. with the cancellation of the student loan and the amount of student debt to be canceled. Biden could maintain his current position that he does not have the legal authority to cancel student loans, or he could change his position and unilaterally cancel student loans. However, the ultimate arbiter of this legal question cannot come from the executive or the legislature. If Congress or the President cancels student loans, expect legal challenges. This means that we could ask the judiciary to rule on the authority of the president, which could not only delay the cancellation of the student loan, but also ultimately settle the pending legal issue. Will your student loans be canceled? Ultimately, it will be up to the President and Congress. In the meantime, when you are weighing your student loan repayment options, here are some smart options to consider to save money:

Student loans: related reading

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Student loan relief for 1 million more borrowers – after $ 2.3 billion in student loan cancellations

Stimulus Checks Coming Soon, But Student Loan Cancellations May Take Longer

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