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The legal opinion is not necessarily binding on the Biden administration, which could reverse or change its interpretation of the laws governing federal student loans. But the memo comes as President-elect Joe Biden is already signaling that he will not accept growing progressive demands that he use executive action to write off student loan debt.
The document was signed Tuesday evening by Reed Rubinstein, who is the acting general counsel for the education department. It was first reported by the Wall Street Journal.
Rubenstein addressed the memo to Education Secretary Betsy DeVos, even though she resigned last Friday following a pro-Trump mob that violently stormed the Capitol. Rubinstein writes that DeVos asked his office to “commemorate” the ministry’s legal stand on the issue of student loan cancellation.
DeVos has previously called Democrats’ proposals to write off student loan debt “crazy.” In his farewell letter to Congress earlier this month, DeVos urged lawmakers to reject pressure from the new administration to write off student loan debt.
Pressure Democrats: Some Democrats, including Sen. Chuck Schumer (DN.Y.), who will become Senate Majority Leader next week, have called on Biden to write off up to $ 50,000 in federal student loan debt per borrower. “You don’t need Congress,” he said in December. “All you need is a swipe of the pen.”
During his campaign, Biden approved the cancellation of a $ 10,000 student loan as an immediate response to the coronavirus pandemic. But he has signaled in recent weeks that he sees this as a legislative, not an executive, priority.
A senior Biden economic adviser said on Friday that Biden wanted Congress to act on the loan forgiveness proposal, although the new administration will unilaterally extend the pause on most federal student loan payments and interest amid the pandemic. Biden also said last month that it was “unlikely” to seek the cancellation of his student loan through management action.
A Democrat-controlled Senate could use a tool known as budget reconciliation to pass a sweeping student loan cancellation with a simple majority vote. The Obama administration used the tool in 2010 to make sweeping changes to the federal student loan system, including eliminating federal guarantees for private student lenders.
But it’s not yet clear whether Democrats will move forward with budget reconciliation or how much support there is in the caucus, especially among more moderate members, for the widespread cancellation of student loans.
Last year, House Democrats initially offered up to $ 10,000 in student loan forgiveness per borrower as part of their Covid relief proposal, although Democratic leaders drastically reduced the proposal due to concerns about the price.
Separately, the House passed an amendment to the annual Defense Policy Bill last year that would have written off up to $ 10,000 in private student loan debt, although it did not survive negotiations with the GOP-controlled Senate, which opposed the widespread cancellation of loans. The amendment won a handful of GOP votes in the House, although some moderate Democrats voted against it.
Senator Elizabeth Warren (D-Mass.), Who is among the progressives pushing Biden to cancel, was the first Democratic presidential candidate last year to advocate for adopting the policy through action of the executive. His campaign published a legal note authored by the Predatory Student Loans Project at Harvard Law School, which paved the way for the Education Department to unilaterally eliminate large sums of debt.
The legal opinion released by the Trump administration on Wednesday is in fact a rebuttal to these legal arguments, which have been widely adopted by progressives. The memo also seeks to explain that the various executive actions of the Trump administration in 2020 to provide relief to borrowers – all of which were taken without Congress – were limited in scope and did not open the door to widespread debt relief. the debt.
Supporters of widespread student loan cancellation argued that the Trump administration set a precedent – if not legal, then political – for Biden to use executive action to cancel loans.
The memo said last year DeVos had “considered its power to provide blanket coverage or mass cancellation” as the administration sought to provide student loan relief during the pandemic, but the Education Department , in consultation with the Department of Justice, had “concluded that she would lack the legal authority to do so. “
In search of the HEA: Progressives cited part of the higher education law – section 432 – which deals with the power of the education ministry to “compromise” and “settle” student loan debts as the primary means for them. to hope that the Biden administration cancels student loan debt.
The Education Department and the White House previously said the Trump administration invoked the law as part of its executive actions to provide pandemic relief for student loan borrowers.
Angela Morabito, a spokeswoman for the department, told POLITICO last year that the agency used Section 432 of the Higher Education Act to unilaterally suspend interest on federal student loans.
“The secretary exercised her authority under s. 432 (a) (6) of the Higher Education Act to allow a temporary waiver of interest based on the unique and special facts presented by the interruption of the COVID-19 pandemic and the consequent declaration of a national emergency by the president, ”Morabito said in an email last August.
White House press secretary Kayleigh McEnany also cited the law as giving the Education Department “broad” powers to take action on student loans during a press briefing on August 10.
The latest Trump administration memo appears to admit the Education Department relied on Section 432 to write off interest on certain loans held by the federal government last March for several weeks before it went into effect of the CARES law. But the memo, in a footnote, describes this action as “the boundary furthest from his authority.”
This part of the higher education law “is best interpreted as a limited authorization for the secretary to provide an annulment, compromise, discharge or pardon only on a case-by-case basis and only in circumstances specified by Congress”, the note states.
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