Financial assistance

Biden’s plan to forgive student loan debt is unconstitutional

President Joe Biden’s plan to forgive student loan debt shows complete disregard for laws that limit his powers. The plan is unconstitutional and should be determined as such by the courts.

In August, Mr. Biden announced plans to forgive $10,000 in student loan debt for borrowers earning less than $125,000. Pell Grant recipients who earn less than $125,000 would be eligible for a $20,000 cancellation. For couples filing jointly, the income limit would be $250,000.

In an attempt to justify this plan on a legal basis, the White House cited the Higher Education Student Aid Opportunities Act of 2003 (HEROES). or national emergency.

Specifically, the Secretary is authorized to waive or modify student loans on behalf of those “who are affected persons [to ensure that they] are not placed in a more unfavorable financial situation in relation to this financial assistance because of their status as data subjects”.

This bipartisan bill is six pages long and its conclusions painfully show that this aid is intended for the military. In fact, the six sections that comprised the conclusions of Congress referred to the military. Specifically, those who were on duty/active duty or leaving duty/active duty. Therefore, those who would be “in a worse financial position in relation to this financial assistance” because they were, literally, abroad fighting a war.

The White House has made this provision and asserted that the COVID-19 pandemic, which has been declared a national emergency, is enabling broad student loan forgiveness for millions of Americans, whether or not they have served in the military. .

This is a dishonest interpretation of the bill, and the White House knows it. Of course, were it not for the shameless misinterpretation of existing law granting this authority to the executive, the president would have no legs to stand on. The Ownership Clause and Appropriation Clause of the Constitution give Congress alone the power to (1) dispose and make all rules and regulations respecting property owned by the United States and (2) the appropriate funds of the Treasury.

Yet the HEROES Act of 2003 is simply not a legal basis for large-scale loan forgiveness: the bill has never given the executive so much leeway, and student borrowers do not match the definition of “data subjects” under this law.

In Whitman v. American Trucking Associations Inc. (2001), Justice Scalia clarified that Congress does not hide major regulatory changes through vague changes to the law: “Congress, we have argued, does not alter the fundamental details of a regulatory regime of vague terms or ancillary provisions – it does not, one might say, hide elephants in mouse holes.

To suggest that members of Congress in 2003 hid this vast executive power in a widely supported, bipartisan, military-friendly bill is precisely the kind of interpretation that the Supreme Court has repeatedly rejected.

In addition, the bill defines an “affected person” as a person on active duty, serving in the National Guard, residing in a disaster area, or a person who “has suffered direct economic hardship as a direct result of war or of another military or national operation”. emergency, as determined by the secretary.

Granted, there is no way to prove that every student borrower suffered “direct economic hardship” as a result of the pandemic. In fact, compared to most Americans, college graduates were quite comfortable during the pandemic.

At the peak of unemployment due to the pandemic – April 2020 – university graduates (bachelor’s degree or higher) had an unemployment rate of 8.4%. At the same time, high school graduates suffered an unemployment rate of 17.6% and those who had not graduated from high school suffered an unemployment rate of 21.1%. By the end of 2021, the unemployment rate for college graduates had already fallen to 2.1%.

If the White House intends to argue in court that this elite group of people as a whole – college graduates – have suffered “direct economic hardship” during the pandemic, they will be making a fool of themselves.

The executive does not have the authority to cancel student loan debt in this manner. If Mr. Biden refuses to stay true to his oath to preserve and defend the Constitution, then he must be held accountable in court.

• Isabelle Morales is a political communications specialist at Americans for Tax Reform.