Politics

Former Obama Official Questions The Legality Of Student Loan Forgiveness

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Kendall Tietz Education Reporter
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Charlie Rose, the former Education Department general counsel under the Obama administration, is “doubtful” President Joe Biden has the authority to forgive student loans through executive action, The Wall Street Journal reported.

“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,” Rose detailed in a confidential May 2021 memo for his law firm, Hogan Marren Babbo & Rose, Ltd, the WSJ reported. (RELATED: Biden Says Right To Abortion Comes From Being A ‘Child Of God’)

If student loan forgiveness isn’t based on individual need and done through regulatory procedures, the Biden administration could risk having its executive action overturned in court, because loan-servicing companies and investors with student loan backed securities could sue over the action, Rose said.

The Biden administration has signaled it is taking action to forgive $10,000 per borrower in student loan debt, which would be done through executive action. Other democrats, such as Senate Majority Leader Chuck Schumer, have signaled they would like to forgive up to $50,000 in student debt.

Rep. Ro Khanna (D-CA) speaks at a Student Loan Forgiveness rally on Pennsylvania Avenue and 17th street near the White House on April 27, 2022 in Washington, DC. Student loan activists including college students held the rally to celebrate U.S. President Joe Biden's extension of the pause on student loans and also urge him to sign an executive order that would fully cancel all student debt. (Photo by Anna Moneymaker/Getty Images)

Rep. Ro Khanna (D-CA) speaks at a Student Loan Forgiveness rally on Pennsylvania Avenue and 17th street near the White House on April 27, 2022 in Washington, DC. (Photo by Anna Moneymaker/Getty Images)

Biden himself has said he is unsure he has the authority to take such action through executive order.

“I don’t think I have the authority to do it by signing with a pen,” Biden said during a CNN town hall last year.

“But I do think that, in this moment of economic pain and strain, that we should be eliminating interest on the debts that are accumulated, number one,” he added. “And number two, I’m prepared to write off a $10,000 debt, but not 50 [thousand].”

Under the 1965 Higher Education Act, the Education Secretary can “enforce, pay, compromise, waive, or release” an unspecified amount of student loan debt, which advocates say gives the executive branch flexibility, the WSJ reported.

But Rose argues “it is fair to discern Congress has inferred that the [Education] Department should not decide the question of mass forgiveness of performing loans,” according to his memo, the WSJ reported. Instead, he suggested rule changes through the federal regulatory process, which he said would provide a stronger legal basis.

Since the start of the pandemic, payment and interest on federal student loans has been paused, but is expected to resume on Aug. 31.

The DOE did not comment on the legality of the executive order but said the Biden administration has been hard at work delivering meaningful relief to student loan borrowers” to ensure “better implementation of student loan programs.”

“While we continue to deliver immediate relief for those struggling with debt, our overall goal is long-lasting change that reduces indebtedness and makes college more affordable, including through rulemaking,” the statement added. “We are also committed to preventing a future debt crisis by holding colleges and universities accountable for leaving students with mountains of debt and without good jobs. The Department’s review of broad based debt cancellation remains ongoing.”

The White House did not respond to the DCNF’s request for comment.

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