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Reason
Reason
Emma Camp

Can Biden Still Forgive Student Debt?

Following a major loss at the Supreme Court, Biden has announced a new plan to forgive student loans. Once again, he will not ask Congress to pass a new law. Instead, he's claiming that the Higher Education Act of 1965 provides statutory authority for mass forgiveness that the HEROES Act did not. 

Earlier this month, the Supreme Court ruled against Biden's plan to forgive up to $20,000 in federal student loan debt per borrower. The Biden administration had attempted to justify the plan using the HEROES Act, a 9/11-era law that allowed the Department of Education to change student loan repayment plans for soldiers who left college to enter active duty military service or respond to a national emergency. 

The Court's majority argued that Biden's plan to forgive $400 billion on a mass amnesty basis was inconsistent with the language of the HEROES Act and that such a plan would require Congress to exercise its power of the purse.

However, the same day Biden's plan was defeated at the Supreme Court, he announced that he would be undertaking a new strategy to cancel billions in federal student debt.

"We will ground this new approach in a different law than my original plan, the so-called Higher Education Act…This new path is legally sound. It's going to take longer, but, in my view, it's the best path that remains to providing for as many borrowers as possible with debt relief," Biden said at a press conference following the Court's ruling. "Today's decision has closed one path. Now we're going to pursue another."

The Higher Education Act of 1965 contains a provision that allows the Secretary of Education to "enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption​​." It also requires the Secretary of Education to review any proposed loan settlement that costs more than $1 million.

Biden seems convinced that this is a lawful path to sweeping loan forgiveness. But will the courts agree? 

"In some ways, the HEA argument is indeed superior to the HEROES Act theory. Taken in isolation from the rest of the Act, Section 432(a) does appear to grant the executive the power to cancel as much student loan debt as it wants, " wrote Ilya Somin last year in the Volohk Conspiracy, which is hosted by Reason. "But a closer look suggests that the HEA theory is flawed for many of the same reasons as the HEROES Act rationale. Indeed, its breath-taking scope contributes to its undoing."

Somin notes that reading one section of the Higher Education Act as allowing blanket loan forgiveness would render redundant other provisions of the law which allow the Secretary to forgive debt in limited circumstances. "There is a longstanding presumption against interpreting statutes in a way that renders parts of them superfluous. The Supreme Court has repeatedly reaffirmed this principle," Somin writes.

The way to forgive student loans is through Congress. The way to fix inflation in higher education is for the government to stop issuing and guaranteeing student loans. Biden is choosing to ignore those realities to buy the loyalty of federal student loan borrowers. 

The post Can Biden Still Forgive Student Debt? appeared first on Reason.com.

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