For more than a year, a broad coalition of activists, unions, civil rights and consumer protection organizations, and elected officials — including leading Democrats in Congress — have urged President Biden to enact widespread student loan forgiveness. And they argued that Biden had the legal authority to cancel student loan debt through executive action, without specific congressional approval.

Biden expressed support for some form of broad student loan forgiveness during his 2020 presidential campaign. White House officials have repeatedly said that if Congress were to pass a loan forgiveness bill students, he would sign it. But no bill seems to be forthcoming.

In the meantime, Biden has focused on “targeted” student loan forgiveness initiatives by expanding and improving access to existing programs such as the Public Service Loan Forgiveness (PSLF) and the Student Loan Relief Program. total and permanent disability (TPD). While the Department of Education has touted more than $16 billion in relief approved so far, proponents note that this represents a fraction of one percent of total student debt outstanding.

Biden has previously expressed reluctance to act without Congress and uncertainty about whether he actually has sufficient legal authority to rely exclusively on executive branch action to implement widespread loan forgiveness. students. But no decision has been publicly announced and there are signs that the matter remains under review. Earlier this month, White House Chief of Staff Ronald Klain said, “The President is going to look at what we should do on student debt before the [payment] the break expires… Whether or not there is executive action [on] canceling student debt when payments resume is a decision we will make before payments resume.

If Biden decides to enact a broad student loan forgiveness through executive action, there are several potential legal avenues to do so, although not everyone agrees that all of these avenues are viable. .

Student loan forgiveness under the Higher Education Act

Several leading legal experts on student loans have argued that the Higher Education Act (HEA) — which is the central law that governs much of the federal student aid system — contains language that gives expressly to the President a broad power to cancel student debt. Through the Secretary of Education, a Presidential Administration may “enforce, pay, compromise, waive, or release any right, title, claim, privilege, or demand, however acquired, including any equity or any right of redemption”, according to the law. . Any exercise of this compromise power “shall be final and conclusive for all accountants and other government officials”.

Proponents argue that this clause is powerful and broad enough to allow meaningful debt cancellation. In a widely circulated memo, several student loan attorneys from the Project on Predatory Student Lending at Harvard Law School’s Legal Services Center wrote that this clause gives the Secretary of Education “broad” power to eliminate federal student loans.

Student loan forgiveness under the HEROES Act of 2003

The HEROES Act of 2003 grants the President the power to “waive or vary any law or regulation applicable to ‘Federal Student Loans under the Higher Education Act’ as the Secretary deems necessary” during a national emergency. declared, such as a pandemic or war.

Although the HEROES Act of 2003 arguably confers a somewhat less broad authority than the HEA, since an administration can only exercise its authority on a case-by-case basis or on a category of people affected by the emergency, it also has a stronger historic power to be used to provide widespread relief. President Trump and President Biden relied on the HEROES Act of 2003 to extend the nationwide pause on federal student loan payments and interest, which has now lasted more than two years, in response to the Covid-19 pandemic. . This resulted in the waiver of billions of dollars in student loan interest.

Given that the pandemic emergency is not yet over and other emergencies may be brewing in light of the worsening conflict in Europe, this status could be a basis for Biden to act.

Student loan forgiveness through an income-based repayment waiver

Last month, a diverse coalition of more than 100 advocacy organizations wrote a letter to the Biden administration, urging Education Secretary Miguel Cardona to enact immediate changes to income-based reimbursement by creating a “waiver” program similar to the ongoing “Limited PSLF Waiver”, which temporarily relaxes loan forgiveness eligibility rules for public service borrowers. The coalition called on the administration to retroactively count every month since a borrower began repayment as months eligible for student loan forgiveness under income-driven repayment plans, including periods of adjournment, abstention and default.

Since income-driven repayment plans provide loan forgiveness after 20 or 25 years (depending on the specific plan), automatic counting of previous loan periods that have been waived could significantly accelerate progress for millions of borrowers. on their loan forgiveness schedule, and push many over the line. To do this, however, the Biden administration would likely have to rely on the HEROES Act of 2003 or another similar law that authorizes temporary changes to existing loan repayment programs.

Student Loan Forgiveness Under New Income-Focused Repayment Plan

Rather than relying on the authority of the HEA or the emergency authority under the HEROES Act of 2003, the Biden administration could instead create a new income-driven repayment plan that has strings attached. more generous and a shorter loan cancellation period.

The HEA already delegates broad authority to the president’s secretary of education to write bylaws establishing an income-contingent repayment plan, and it gives the secretary discretion to establish key elements of that plan – including the formula used to calculate payments and length of repayment term. In theory, under this existing HEA authority, the secretary could establish a new income-driven plan with a more affordable monthly payment and a much shorter repayment term. This new plan could even potentially allow past repayment periods to be factored into this shorter repayment term, significantly accelerating loan forgiveness progression for many borrowers.

This process has already been used to create new income-driven plans, such as Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE). And the Department is currently using this process to try to create a new income-based plan called Expanded Income Contingent Reimbursement (EICR). However, the ministry’s specific EICR proposal has been widely criticized by advocates as being too complicated and not particularly useful for most borrowers.

The advantage of the regulatory process is that it is legally sound, as long as regulations are drafted in accordance with federal law and required procedures. The downside is that it takes a long time – from start to finish, the process can take two years.

Debate continues over student loan forgiveness

Of course, the above legal options are not universally accepted. Other higher education experts, including some former attorneys for the Department of Education during the Trump administration, argued in a memo that neither the HEA nor the HEROES Act of 2003 confers such power. wide to a president to enact widespread student loan forgiveness (this memo has since been removed from the Department’s website). Meanwhile, borrower advocates say millions can’t wait for a multi-year regulatory review process to unfold and student loan forgiveness to happen now (or at least, very soon).

For now, borrowers will have to keep waiting and seeing what, if anything, the Biden administration is prepared to do in terms of enacting widespread student loan forgiveness.

Further Reading on Student Loans

Who qualifies for the $6 billion student loan forgiveness announced by the Biden administration

Biden should permanently abolish interest on student loans, says key senator

Biden could extend student loan suspension and plans to forgo loans, White House official says

Thousands of Jobs Qualify for Expanded Student Loan Forgiveness Program