The legal opinion is not necessarily binding on the Biden government, which may change or alter the interpretation of the laws applicable to federal student loans. But the memorandum comes as Elected President Joe Biden has already indicated that he will not concede to increasingly progressive demands that he take action to cancel the student loan debt.
The document was signed Tuesday night by Reed Rubinstein, who serves as acting chief executive of the Department of Education. This was first reported by the Wall Street Journal.
Rubenstein addressed the memorandum to Education Minister Betsy DeVos, though she resigned last Friday following a pro-Trump mob that violently stormed the Capitol. Rubinstein writes that DeVos asked his office to “commemorate” the department’s legal view on the issue of forgiveness for student loans.
DeVos has previously called Democrats’ proposals to cancel student loan debt ‘crazy’. In its farewell letter to Congress earlier this month, DeVos urged lawmakers to reject incoming government pressure to cancel student loan debt.
Print from Democrats: Some Democrats, including Senator Chuck Schumer (DN.Y.), who will become the Senate majority leader next week, have asked Biden to cancel as much as $ 50,000 in federal student loan debt per borrower. “You do not need a congress,” he said in December. “All you need is a pin clip.”
During his campaign, Biden endorsed $ 10,000 in student loan cancellation as an immediate response to the coronavirus pandemic. But he has indicated over the past few weeks that he sees it as a legislative, not executive, priority.
A key economic adviser to Biden said Friday that Biden wants Congress to act on the loan forgiveness proposal, although the incoming government will unilaterally extend the interruption of most federal loan payments and interest rates amid the pandemic. Biden also said last month that he was unlikely to practice forgiveness for student loans through executive action.
A Democrat-controlled Senate can use a tool known as budget reconciliation to pass widespread forgiveness for student loans by a simple majority vote. The Obama administration used the tool in 2010 to make sweeping changes to the federal student loan system, including eliminating federal guarantees for private student loans.
But it is not yet clear whether the Democrats will account for the budget conciliation or how much support there is in the caucus, especially among moderate members, for the widespread cancellation of student loans.
House Democrats initially proposed up to $ 10,000 in student loan forgiveness per borrower last year as part of their Covid relief proposal, though Democratic leaders scaled back the proposal significantly amid concerns over the price.
Separately, the House last year passed an amendment to the annual defense policy bill that would cancel up to $ 10,000 in private student loan debt, though it did not survive the negotiations with the GOP-controlled Senate, which opposed widespread loan forgiveness. The amendment garnered a handful of GOP votes in the House, although some moderate Democrats voted against it.
Senator Elizabeth Warren (D-Mass.), Who is one of the progressives urging Biden to cancel, was last year the first Democratic presidential candidate to take up the cause for adopting the policy through executive action. Her campaign released a legitimate memo written by the Harvard Law School’s Project on Predatory Student Lending, which showed a way for the Department of Education to eradicate large amounts of debt unilaterally.
The legal opinion published by the Trump administration on Wednesday is a refutation of the legal arguments widely accepted by progressives. The memorandum also seeks to explain that the Trump administration’s various executive actions in 2020 to provide relief to borrowers – all taken without Congress – were limited and did not open the door to widespread debt relief.
Advocates for widespread student loan cancellations have argued that the Trump administration has set a precedent – if not a legitimate one, then a political one – for Biden to use executive action to cancel loans.
According to the memorandum, DeVos last year “considered its authority to grant a cover or mass cancellation”, as the administration wanted to grant the student loan during the pandemic, but that the education department, in consultation with the justice department, “until concluded that she would receive a shortage statutory authority to do so. ”
Look at the HEA: Progressive people have mentioned a section of the Higher Education Act – section 432 – which discusses the power of the Department of Education to compromise and discuss ‘settlement’ of student loan debt as the primary way they hope to the Biden administration cancels student loan debt.
The Department of Education and the White House said earlier that the Trump administration had appealed to the law as part of its executive action to provide pandemic relief to student loan borrowers.
Angela Morabito, spokesperson for the department, told POLITICO last year that the agency had used section 432 of the Higher Education Act to unilaterally suspend interest on federal student loans.
‘The secretary exercised her authority under art. 432 (a) (6) of the Higher Education Act to allow temporary exemption from interest on the basis of the unique and special facts provided by the interruption of the COVID-19 pandemic and the consequent declaration of a National Emergency by the President is submitted, ”Morabito said in an email last August.
White House Press Secretary Kayleigh McEnany quoted the same law as giving the education department a “broad” power to act on a student loan during a August 10 press conference.
The latest memo from the Trump administration seems to admit that the Department of Education did rely on section 432 to forgive interest on certain federal loans for a few weeks last March before the CARES law went into effect. But the memo, in a footnote, describes the action as the ‘far limit of its authority’.
The section on the Higher Education Act “is best interpreted as a limited authorization for the Secretary to grant cancellation, compromise, dismissal or forgiveness only on a case-by-case basis and then only under the circumstances as specified by Congress,” states.