Q&A – President Biden’s Latest Student Loan Debt Forgiveness Plan
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Today’s Entry: Submitted via talkback. Asking about President Biden’s latest angle to attempt student loan debt forgiveness after having been shut down by the Supreme Court previously.
Bottom Line: There’s been a drip-drip-drip attempt by President Biden to achieve his previously promised student loan debt forgiveness plan following last year’s ruling by the Supreme Court that the president's broad effort to forgive $400 billon was unconstitutional. In February there was news that President Biden was attempting to forgive $1.2 billion in student loan debt. The SAVE plan, Saving on a Valuable Education, as it was dubbed by the White House was said to cut many borrowers’ monthly payments to zero, will save other borrowers around $1,000 per year, will prevent balances from growing because of unpaid interest, and will get more borrowers closer to forgiveness faster. While still significant in its cost to American taxpayers if successfully implemented, the reach of that proposal was relatively modest – with an estimated 150,000 borrowers who were said to have been eligible at the time. However just last week it was announced there had been an expansion of the SAVE plan and an additional 277,000 borrowers would receive an additional $7.4 billion in forgiveness...and that’s all independent of the biggest news of all.
Earlier this month a far broader based effort on student loan debt forgiveness was brought forward by the Biden Administration. Under terms of the recently announced plan, about 37 million of the estimated 45 million Americans with student loan debt would have money owned for their education forgiven. Under the terms outlined by the White House it would:
- Fully eliminate accrued interest for 23 million people
- Provide $5,000 reductions in student loans for over 10 million people and
- Fully cancel the balances owed for approximately 4 million students
The average participant in this relief program would see an approximate $20,000 reduction in what they owe in student loans. Incidentally that newly announced plan is now within a 30-day public comment period in which any American can express their opinion to the Biden administration about the program. That window for comment will remain open through May 17th. I would encourage you to submit your comment on this proposal. I’ll share with you what I submitted:
This attempt at student loan debt forgiveness is an outrageous attempted abuse of power. It's an affront to all American taxpayers who would be on the hook for the cost of the loan forgiveness in addition to all who've previously paid off their student loans as promised when they were taken out.
Congress has not authorized this relief and the Supreme Court's previous decision striking down the attempted use of the HEROS ACT makes it clear that it's unconstitutional for the President to unilaterally spend money not authorized by Congress.
As for the constitutionality of this proposal and what comes next...
Having failed to unilaterally implement student loan debt forgiveness under the war-on-terror era HEROS ACT, the Biden administration is attempting this effort under the 1965 HEA, or Higher Education ACT. While the law doesn’t say anything about an administration forgiving student loans, it does say the administration can negotiate rules on its own. Like the previously attempted effort – it's clear that the Biden administration is attempting to use a decades old law to achieve something the law was never designed to do. Independent of other factors, that alone makes the likelihood of the broad approach unlikely to stand as attempted before the Supreme Court should it get that far. In fact, due to the attempted effort to implement this policy this fall, just before the election, it’s likely the court system could take extraordinary steps stop it from getting that far. Typically, courts don’t take favorably to end around efforts to previous rulings.
Florida is among several states suing over the new plan (as the state did the first time around). At the time of the filing of the lawsuit AG Ashley Moody said: Last year, the Supreme Court struck down Biden’s illegal attempt to force Americans to pay off someone else’s debt. Now, Biden thumbs his nose at the court like he has done with so many issues, including immigration, and does what he wants, trying again to mass-cancel student debt. We will fight in court to make sure that hard-working Americans, who are struggling to buy groceries thanks to Biden, are not on the hook for other people’s debt. Yet again, the President is unilaterally trying to impose an extraordinarily expensive and controversial policy that he could not get through Congress. This latest attempt to sidestep the Constitution is only the most recent instance in a long but troubling pattern of the President relying on innocuous language from decades-old statutes to impose drastic, costly policy changes on the American people without their consent.
In Chief Justice Robert’s majority opinion on the original plan, he said this: The HEROES Act allows the secretary of education to “waive or modify” laws and regulation governing student loan programs. He defined the word modify to mean: “modest adjustments and additions to existing provisions” as opposed to “transforming” the programs. By all appearances what’s being attempted here runs counter to that guidance once again.