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Democrats Question Legality of Biden’s Mass Student Loan Forgiveness Scheme

“People think that the President of the United States has the power for debt forgiveness. He does not… that has to be an act of Congress,” said House Speaker Nancy Pelosi.
President Biden himself expressed skepticism about his own legal authority to forgive student loans.
And an Obama-era Department of Education lawyer believes that President Biden’s student loan forgiveness plan would face massive legal challenges.
In Case You Missed It via the Wall Street Journal, even a top Obama Education Department lawyer agrees that President Biden’s mass student loan forgiveness scheme is “legally risky.” 

Mass Student Debt Cancellation Legally Risky, Says Top Obama Education Lawyer
By Gabriel T. Rubin
May 4, 2022
President Biden would be on shaky legal ground if he were to pursue broad-based student debt cancellation by executive action, President Barack Obama’s former top Education Department lawyer wrote in a legal analysis.

Using executive action to cancel debts for student borrowers without tying relief to their individual needs and using regulatory procedures would put the Biden administration at risk of having its plan overruled in court, according to a legal analysis prepared by Charlie Rose, who served as the top lawyer in the Education Department under President Obama from 2009 to 2011.
“If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation,” Mr. Rose wrote in a memo for his law firm, Hogan Marren Babbo & Rose, Ltd. He suggested that loan-servicing companies and investors that own securities backed by student loans might be in a position to sue the administration over broad-based debt cancellation.

A series of redacted emails and memos was released by the Education Department last August showing that the administration was wrestling with the legal question of debt cancellation. 

Mr. Biden has also raised questions about whether he has the power to take executive action to cancel student debt on a large scale. “I don’t think I have the authority to do it by signing with a pen,” Mr. Biden said during a CNN town hall last year. 

While Congress has created several payment and debt-forgiveness programs aimed at different groups of borrowers—public servants or low-income borrowers, for example—“it is fair to discern Congress has inferred that the [Education] Department should not decide the question of mass forgiveness of performing loans.”
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