Calls for student loan forgiveness expected to intensify as Biden’s legislative agenda stalls

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The passage of the Build Back Better Act, President Joe Biden’s ambitious social spending and climate change legislation, as originally written after liberal West Virginia Democrat Sen. Joe Manchin declared his protest in the days before Christmas and reiterated this week that there was no discussion on the bill.

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While it’s possible that Democrats could muster their razor-thin margins in the House of Representatives and the Senate to pass some sort of stripped-down spending bill, it’s almost certain that Biden will be elected to the House of Representatives later this year or in November. Possible damages will be after. Elections turn to regulatory changes as the primary vehicle for their policy vision.

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Analysts at Beacon Policy Advisors wrote, “While Biden will seek to bring some version of his Build Back Better legislative agenda, he will bolster his party’s base with victories in the midterm elections, requiring Congressional action.” do not require.” , in a note to customers this week.

The Biden administration doesn’t shy away from using executive authority to implement its economic agenda. For example, it has raised the minimum wage for federal contractors to $15 an hour, while federal agencies, from the Federal Trade Commission to the Department of Agriculture, are engaging in an administration-wide review of antitrust policy.

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But there are other policies that could propel Biden’s base over student loan forgiveness, given that voters with college degrees support Biden as president. in great numbers Voter without degree.

Senate Majority Leader Chuck Schumer, a New York Democrat, has consistently urged Biden to use executive authority to forgive up to $50,000 per student in federally-backed student loan debt, a move that could result in a budget deficit in the long run. would add $1 trillion, According to the Brookings Institution, (However, this would not be included in the national debt, as the debt had already been issued to make up the debt in the first place.)

Biden has said he does not believe he has the legal authority to forgive student loans by legal authority, and has said he would prefer Congress to authorize a waiver of $10,000 in student loans per student. Earlier this year, White House officials said they were Reviewing Biden’s legal right to cancel student loans through executive action.

Legal experts say there is no clear answer as to whether the president has the authority to cancel student loans. Opponents of the policy say it would violate the Constitution’s Appropriations Clause and the 1982 Antideficiency Act, which prohibit the executive from spending money without the authority of Congress.

Proponents of the policy say that these provisions do not apply to student loan forgiveness, because Congress has authorized the spending and federal law gives the Secretary of Education broad authority to decide how and what to collect loan repayments. .

“Everyone agrees that the Secretary of Education has the authority to make adjustments on federal student loans,” Howell Jackson, Harvard University law professor, wrote in an article in April. regulatory review, “The debate turns to the precise meaning of the provisions of the Higher Education Act of 1965, which empowers the secretary to ‘consent to amend’ and ‘compromise, waiver, or release’ certain student loans due.”

When Biden and the House speaker, a California Democrat, say they do not believe the president has the legal authority to cancel student loans, they are referring to interpretations of the HEA and other relevant laws. But a more important question, according to some advocates of the policy, would be whether there would be any recourse for opponents of the policy to stop the president if he proceeded.

According to a recent memo released by Massachusetts Democratic Sen. Elizabeth Warren, “litigations challenging administrative student loans will fail,” adding that it would be difficult for any individual or state to prove they were wronged by the policy. is, a necessary step for plaintiffs to stand in federal court.

Jackson argued in a Harvard Law School briefing paper that companies that the federal government hires to service federal student loans may be more likely to stand if they wish to sue the government. He said the federal government was prepared to pay about $1.1 billion in student loan service last year, and that the loss of such revenue could prompt those companies to sue to block the forgiveness.

The Warren memo, however, argued that it is unlikely that courts would stop these companies from forgiving damages completely. “Even if a person or institution could successfully argue that they stood, they somehow were”
injustice, and that they are owed some legal remedy – no person or entity can reasonably argue that the remedy of their lawsuit should indefinitely keep millions of student loan borrowers in debt,” it reads.

Even though political considerations take precedence over the law, it is unclear whether the Biden administration will implement student loan forgiveness by fiat, according to Beacon research analyst Charlotte Jenkins.

“Biden has expressed skepticism about the blanket waiver that allows students attending elite institutions to be relieved and possibly anticipates backlash from angry voters who have already paid off their own student loans. or those who have not opted for higher education because of its cost,” she said. Wrote in Friday’s note to customers.

Jenkins said, “The dilemma is further exacerbated by the fact that it is more difficult to implement means-tested pardons through executive action that could make pardons more palatable to moderates and millions of blue-collar activists through Biden presidential action.” as a litmus test,” Jenkins said.

Jenkins wrote, “The coming midterm elections will put avoidance and apology on the agenda as the Democratic Party debates the political consequences of each outcome.”

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