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Canceling Biden’s Student Debt Cancellation

The opinions expressed by columnists are their own and do not necessarily represent the views of
AP Photo/David Dermer

President Biden’s unilateral act via his Secretary of Education to waive over $500 billion in debts owed on student loans violates the very section of the HEROES Act, 20 USC § 1098bb(a)(1)(2)(A), cited by the Department of Education for its authority to waive some 80% of all student indebtedness. Biden’s action is an abuse of discretion. It violates the Separation of Powers and Major Questions doctrines. Consistent with his pattern to date, President Biden has once again acted like a dictator with legislative powers he does not constitutionally have, usurping the exclusive power of Congress to make the laws. If a party with standing (such as a student loan servicing company adversely affected by the debt cancellation) sues, the Courts should strike down this latest attempt to flout the law and disregard constitutional limits on executive powers.


Under Section 1098bb(a)(1)(3)(A) of the HEROES Act, the Secretary of Education is empowered to waive student loan debt in specific defined circumstances. In an August 23 memo, DOE General Counsel Lisa Brown advised Secretary of Education Cardona that the authority to forgive $500 billion in student loan debt, an estimated 80% of student indebtedness, comes in a subparagraph of the HEROES Act that permits the Secretary to waive indebtedness when: “recipients of student financial assistance under Title IV of the Act who are affected individuals are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals.” The term “affected individuals” is elsewhere defined in the Act as “an individual who—(A) is serving on active duty during a war or other military operation or national emergency; (B) is performing qualifying National Guard duty during a war or other military operation or national emergency; (C) resides or is employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency; or (D) suffered direct economic hardship as a direct result of a war or other military operation or national emergency, as determined by the Secretary.” The term national emergency is defined in the Act as an emergency so declared by the President.

Using this authority, Biden presumes to cancel the overwhelming majority of student loans. This is the classic example of what Justice Alito has referred to as “squeezing an elephant into a mouse hole.” There is no basis in legislative history to presume that Congress ever delegated to the Department of Education a power to categorically eliminate 80% or more of all student loan debt thereby saddling the rest of America with the super inflationary $500 billion without the Secretary determining the extent to which each individual students satisfy the requirements of Section 1098bb. Indeed, that mass loan forgiveness is of a kind that raises the Major Questions doctrine recently expounded upon by the Court in West Virginia v. EPA. It most certainly involves a major economic decision that the Congress of the United States has not addressed directly and must be allowed to address consistent with that doctrine.


Focusing on the statutory sections invoked by the Administration, an issue arises based on the plain language.  There is no proof or administrative record acquired by the Department of Education Secretary to establish that all students granted waivers have “suffered direct economic hardship as a direct result of a . . . national emergency.” The President claims the national emergency is the COVID epidemic, but COVID death and disability is an extremely rare phenomenon at the time DOE granted the waiver, particularly among college aged youth who contract and survive the illness with great regularity. Moreover, there is no proof that each recipient has suffered any kind of economic injury as a direct result of the pandemic. To ascertain direct injury, the DOE Secretary would have to obtain competent proof from each person for whom a waiver is contemplated establishing a genuine financial injury directly traceable to the pandemic. Even if a student suffered economic injury provably resulting directly from the pandemic, the DOE Secretary would also have to prove the impact experienced reduced that individual’s ability to pay student loan indebtedness (i.e., were placed in a “worse position financially in relation to that financial assistance” because of the pandemic).

The essential proof for waiver of student loan debt is impossible to establish in the abstract and requires each individual circumstance to be assessed. Otherwise the review performed by the Secretary cannot satisfy his burden of proof under the statute. It is highly doubtful that most student loan recipients have been provably harmed in their relative ability to pay back their student loans by the pandemic. Most have not suffered disabling illness or permanent injury because of the pandemic. All have been given deferments from paying loan indebtedness by the Administration during the pandemic. Most who receive student loans have employment prospects equal to, or greater than, those who do not go to college. Most come from upper middle class or wealthy backgrounds and have benefited from parental assistance with college expenses and loan payments. In any event, it would be difficult in the extreme, would be purely conjectural, to conclude that a college student loaned money to attend school will be less likely or unlikely to be employed after graduation or that a student who has graduated did not receive job offers or obtained lesser employment as a direct result of the pandemic as opposed to myriad other factors such as relative merit, suitability for the position, Joe Biden’s climate change agenda and destruction of the fossil fuel industry, or failure to apply for work.


Finally, there is no basis to conclude that Congress intended for the HEROES Act to be used to cancel student indebtedness in mass. Indeed, before the current DOE General Counsel concluded in August 2022 that there was HEROES Act authority to waive virtually all student loan indebtedness to the government, the prior DOE Principal Deputy General Counsel Reed Rubinstein concluded the opposite. In Rubinstein’s memo of January 2021, he wrote: “the Secretary does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances and/or to materially modify the repayment amounts or terms thereof, whether due to the COVID-19 pandemic or for any other reason.”

Some legal scholars argue Biden’s student loan debt cancellation will avoid judicial review altogether. They say no one will have standing to sue Biden’s student loan debt cancellation (i.e., no one will suffer a concrete injury directly traceable to the debt cancellation). The best candidates to sue appear to be loan servicers who suffer an economic loss from debt cancellation or an added regulatory compliance burden associated with it.

The President appears to anticipate that his unilateral mass debt cancellation might be rejected by the courts.  Administration lawyers have come up with a back-up plan. If the mass waiver is illegal, they will simply have DOE issue blanket waiver forms to every indebted student, inviting each to recite how the pandemic caused them to suffer economic injury and, upon that self-certification, issue waivers. The Administration aim is to issue enough individual waivers to cover everyone who the President unilaterally intended to be set debt free (some 80% of all student borrowers). That approach, however, is too cute by far and invites further legal challenge and invalidation if standing hurdles can be overcome.


The HEROES Act places the burden of proof on the Secretary to determine the existence of evidence sufficient to grant a waiver. That burden requires the Secretary to confirm evidence sufficient to enable such a determination. Mass cancellation, however conceived, including if after a superficial distribution of self-certified waiver forms where the Secretary (with a wink and a nod) grants every one fails to satisfy the statute.

In the end, if standing is found and federal courts follow the statute and the Constitution, they will hold Biden’s patently crass political gambit unlawful and strike it down. His action reveals not only a contempt for the rule of law but also a willingness to court votes for Democrats in the mid-terms by bribing college students, doing so in a way that likely saddles all future students with higher tuition costs and the American people with higher costs for goods and services.


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