Opinion

BRAGDON: How To Stop The Next Student Debt Cancellation Fiasco

Photo by Paul Morigi/Getty Images for We, The 45 Million)

Tarren Bragdon Contributor
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It’s not enough to reform federal student loans. Yet fixing a broken system is the main reaction from Republicans and conservatives following President Biden’s unprecedented decision to unilaterally cancel student debt. Over the weekend, the President himself all but admitted this potentially trillion-dollar attempt to buy votes before the midterms is illegal. It’s equally important to ensure that the current president, as well as future ones, can’t pull the same stunt every election cycle. That’s why Congress should expand the REINS Act as soon as possible.

President Biden can try to get away with canceling student loans because there’s no effective check on the federal bureaucracy, which the White House largely controls. He directed the U.S. Department of Education to implement his plan, canceling up to $20,000 ($40,000 for married couples) for roughly 43 million borrowers. The bureaucrats are now hard at work figuring out the best way to take money from low- and middle-income Americans and give it to mostly highly educated, high-income people who make as much as $250,000 a year.

One path the Department may take is a formal regulation. In its legal memorandum justifying loan cancellation, the Biden administration stated that the education secretary “might alter the relevant regulations to provide that they would require repayment only of a portion of a loan.” Another option is for the secretary to change regulations to “state that the regulations apply only to certain borrowers or are limited to particular circumstances.”

Yet drafting or changing a formal regulation takes time, since the Department of Education follows the lengthy rulemaking process of the Administrative Procedure Act. That includes drafting a rule, soliciting public comment, responding to those comments, and potentially making revisions before issuing a final regulation. The process could take the better part of a year, if not longer. It’s obviously in President Biden’s interest to cancel student debt as quickly as possible, so borrowers remember and reward his party at the ballot box. 

Thus, the Biden administration may take a sneakier tack. Instead of issuing a formal regulation, the Department of Education may issue “guidance” or start canceling debt through simple agency action. Early signs indicate this may be the plan. Department officials have indicated they’ll let students start applying for this taxpayer handout no later than early October, with cancellation happening four to six weeks after that. (Eight million borrowers will get automatic cancellation.) That timeline coincides closely with the midterm elections.

President Biden announced this blatant, politically motivated, trillion-dollar giveaway without any input or appropriation from Congress. Yet lawmakers can ensure their say in the matter should this happen again. If Republicans retake Congress this fall, they should prioritize passing an expanded version of the “Regulations from the Executive in Need of Scrutiny” Act, or REINS Act for short. The law would require Congress to approve future student loan cancellations before they go into effect. There would be real debate, real accountability and a real vote on the policy’s merits.

The original version of the REINS Act, proposed in 2009, requires that Congress vote on major regulations, defined as costing $100 million or more annually. If the Department of Education passed an official rule, this check-and-balance would apply. But that wouldn’t be the case if a presidential administration tried guidance or another path. An expanded REINS Act would broaden the definition of a major regulation to officially include guidance, agency implementation of executive orders, and other forms of administrative action outside of rulemaking. Politically diverse states, from Florida to Colorado, have implemented similar policies.

Under this policy, Congress would have to give its approval, no matter which tack a White House takes. Regarding student loan cancellation, lawmakers would prevent electoral meddling, protect taxpayers, and provide fairness for the majority of Americans who didn’t go to college or already paid off their student loans. And of course, an expanded REINS Act would allow Congress to block a slew of other costly and dangerous federal mandates before they take effect, ending the current era of regulation without representation.

 This will not be the last time a president tries to buy votes by canceling student loan debt. It may not even be the last attempt by President Biden, who could do something similar when running for re-election in 2024. The stage is set for the President of the United States to continually waste the American people’s money bailing out some of the most well-connected and well-to-do students in the nation. If that happens, higher education will become more broken and expensive than it already is, even as the quality of education falls further. 

Republicans can’t let that happen. An expanded REINS Act is the best way for Congress to prevent another student loan debt cancellation fiasco, and all the damage that will follow.

Tarren Bragdon is the CEO at the Foundation for Government Accountability, which he founded in 2011 to advance policy solutions that open up the American Dream to millions and advance free market principles. He previously served as the chief executive officer at the Maine Heritage Policy Center and in the Maine House of Representatives. He remains the youngest person elected to the Maine Legislature, serving from 1996 to 2000.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.