The legal opinion is not necessarily binding on the Biden government as it could reverse or change the interpretation of federal student loan laws. But the memo comes as President-elect Joe Biden is already signaling that he will not comply with growing progressive demands for him to use executive action to pay off student loan debt.
The document was signed Tuesday evening by Reed Rubinstein, acting general counsel for the Education Department. It was first reported by the Wall Street Journal.
Rubenstein addressed the memo to Education Secretary Betsy DeVos despite resigning last Friday after a pro-Trump mob forcibly stormed the Capitol. Rubinstein writes that DeVos asked for his office to “commemorate” the department’s legal perspective on student loan allocation.
DeVos previously called the Democratic proposals to pay off student loan debt “insane”. In her Farewell letter to Congress earlier this monthDeVos urged lawmakers to reject the incoming administration’s push to repay student loan debts.
Print of Democrats: Some Democrats, including Senator Chuck Schumer (D-N.Y.), Who will be named Senate majority leader next week, have urged Biden to cut up to $ 50,000 in student loan debt per borrower. “You don’t need a Congress,” he said in December. “All you need is the movement of a pen.”
During the campaign, Biden advocated canceling a $ 10,000 student loan in an immediate response to a coronavirus pandemic. But he has been signaling in recent weeks that he sees this as a legislative rather than executive priority.
A top Biden economic adviser said Friday that Biden would like Congress to respond to the lending proposal, although the new administration will unilaterally extend the hiatus on most federal student loan payments and interest during the pandemic. Biden also said last month that he was “unlikely” to conduct student loan forgiveness through executive action.
A democratically controlled Senate could use a tool known as budget reconciliation to achieve widespread simple majority student loan forgiveness. The Obama administration used the tool in 2010 to make major changes to the federal student loan system, including the removal of federal guarantees to private lenders.
However, it is not yet clear whether the Democrats will push the budget vote or how much support the caucus, especially among moderate members, is providing for widespread student loan cancellation.
Last year, as part of their Covid aid proposal, House Democrats initially suggested granting student loans of up to $ 10,000 per borrower, although Democratic leaders scaled back the proposal significantly amid price concerns.
Separately, the House passed an amendment to the annual Defense Policy Bill last year that would have cut up to $ 10,000 in private student loan debt despite failing to negotiate with the GOP-controlled Senate, which against a lending was widespread. The amendment won a handful of GOP votes in the House, although some moderate Democrats voted against it.
Senator Elizabeth Warren (D-Mass.), One of the progressives pushing for Biden to be canceled, was the first Democratic presidential candidate last year to speak out in favor of the policy being adopted by executive action. Your campaign published a legal memo written by Harvard Law School’s student predatory loan project that set out a way for the education department to unilaterally reduce large debts.
The legal opinion released by the Trump administration on Wednesday is, in effect, a refutation of those legal arguments that have been widely accepted by progressives. The memo also seeks to explain that the Trump administration’s various executive actions in 2020 to relieve borrowers – all of which were taken without Congress – were limited in scope and did not open the door to comprehensive debt relief.
Proponents of widespread student loan cancellation have argued that the Trump administration has set a precedent – if not legal, then political – in which Biden is using executive action to cancel loans.
The memo states that DeVos “considered its authority to provide blanket or bulk cancellation” last year when the administration tried to provide student loan relief during the pandemic, but the Department of Education in consultation with the Department of Justice “Had come to the conclusion that she lacked legal authority to do so. “
With a view to the HEA: Progressives have cited a portion of the Higher Education Act – Section 432 – that discusses the Department of Education’s authority to “compromise” and “settle” student loan debt as the primary reason the Biden government canceled the student loan debt.
The Department of Education and the White House previously said the Trump administration had used this bill as part of its executive measures to allow student loan borrowers to experience a pandemic.
Angela Morabito, a department spokeswoman, 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 powers according to Sec. 432 (a) (6) of the Universities Act to allow a temporary waiver of interest based on the unique and special facts arising from the interruption of the COVID-19 pandemic and the resulting declaration of a national emergency by the President surrendered, ”Morabito said in an email last August.
White House press secretary Kayleigh McEnany also cited this bill as a “far-reaching” authority for the Department of Education to take action against student loans during a school year Press conference on August 10th.
The Trump administration’s most recent memo appears to admit that the Education Department relied on Section 432 to pay interest on certain federal government-held loans for several weeks last March before the CARES bill went into effect. But the memo footnotes this act as the “ultimate limit of your authority.”
This part of the Higher Education Act “is best understood as a limited authorization for the secretary to cancel, compromise, discharge or forgive only on a case-by-case basis and then only under the circumstances set by Congress,” states the States memo .