Current News Today

- Advertisement -

- Advertisement -

No, Biden Can’t Forgive Student Loans By Executive Order

Advocates of student loan forgiveness are fond of pointing out that President Biden’s Education Department has already canceled nearly $10 billion of federal student loans this year. Senator Elizabeth Warren argues that this precedent makes clear Biden’s authority to cancel all federal loans by executive order.

“The president has the authority to cancel student loan debt,” she said in a recent MSNBC interview. “You know how I know that? Because President Obama did it. Because President Trump did it. And because President Biden has done it.”

Senator Warren is wrong. In reality, the Biden administration’s cancelation of $10 billion in student loans proves the opposite point: the executive branch has no authority to cancel student debt unless Congress says so.

Most recently, the Department of Education canceled $1.1 billion in federal student loans for 115,000 borrowers who attended ITT Technical Institute, a now-defunct chain of for-profit colleges. The Department discharged that debt under borrower defense to repayment, a statute Congress created to allow borrowers who were defrauded by their colleges to receive debt relief.

The Biden administration has also forgiven $5.8 billion in loans for 323,000 borrowers who have a total and permanent disability that renders them unable to earn significant income. Like borrower defense, the total and permanent disability discharge is a program Congress expressly authorized. While the Education Department has some discretion regarding how to implement these programs, the underlying authority comes from Congress.

Advocates of debt cancelation by executive order point out that the Higher Education Act gives the Secretary of Education power to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired.” This provision would seem to give the Secretary broad power to cancel student debt.

But as financial aid expert Mark Kantrowitz notes, another part of the statute limits the secretary’s authority. He only has the power to cancel obligations owed to the U.S. government “in the performance of, and with respect to, the functions, powers, and duties, vested in him by this part.”

In other words, the Secretary of Education only has the power to forgive student debt when Congress gives it to him.

When President Biden has canceled student debt, it has always been under the authority of a specific program authorized by Congress. Borrower defense is one example: Congress gives the Secretary of Education authority to cancel debt after instances of outright fraud. Congress also allows the secretary to cancel debt when borrowers experience a total and permanent disability. Borrowers who work in public service for ten years can also receive a loan discharge.  

In each of these circumstances, Congress created a specific provision for loan cancelation, and required borrowers to meet certain conditions before receiving forgiveness. If the Secretary really had the broad authority to cancel student…

Read More:No, Biden Can’t Forgive Student Loans By Executive Order

Get real time updates directly on you device, subscribe now.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.