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Biden on using executive action to write off $ 50,000 in student debt: “I think that’s pretty questionable”

President-elect Joe Biden said it was “unlikely” to use his authority to unilaterally write off $ 50,000 in student debt for individual borrowers, weighing down a debate that has raged for months.

“I’m going to be in trouble for saying that, [but] arguably the president may have the executive power to write off up to $ 50,000 in student debt, ”Biden told the Washington Postby Karen Tumulty. “Well, I think that’s pretty questionable. I’m not sure of it. I probably wouldn’t do that.

The idea of ​​a large cancellation of student debt has its origins in Occupy Wall Street, but it truly burst onto the mainstream political scene during the Democratic primaries, when Elizabeth Warren and Bernie Sanders campaigned on some form of student debt cancellation as they contested for the party’s nomination.

The combination of the economic devastation of the coronavirus pandemic and Biden’s election as president has given the idea new urgency. With the status of Congress uncertain and the possibility that it will remain divided if Democrats fail to win the two U.S. Senate seats in Georgia next month, student debt cancellation has become a political approach the new administration has taken. could use to provide some relief. to borrowers without Congress.

See: Republican Senate Speaker Loeffler lags Democrat Warnock in final Georgia second-round ballot

In September, Senator Warren and Senate Majority Leader Chuck Schumer urged the the new president to immediately write off up to $ 50,000 in student debt, a call echoed by other lawmakers, including House Democrats Ilhan Omar and Ayanna Pressley.

They argued that the president had the legal power to write off the debt.

In a letter Accompanying Warren and Schumer’s resolution in September, attorneys for the Harvard Law School Predatory Student Loans Project wrote that “Congress has granted the secretary more specific and unrestricted power to create and cancel or modify debt. owed under federal higher education student loan programs. Act (HEA) itself.

In other words, the president could order the secretary of education to write off the debt.

That authority is what Biden seemed to question in the interview released Wednesday. And even among those who support widespread student debt cancellation, there is some concern that this outcome will be pursued through executive action.

David Bergeron, senior researcher at the Center for American Progress, a left-wing think tank, is part of that camp. Bergeron, who worked at the Department of Education for more than 30 years, said touring Congress raises a number of legal questions, including how the department would repay money the agency borrowed from the Department of Education. Treasury when it issued the loans.

This, Bergeron said, would put education ministry officials, including the secretary, at risk of violating the Anti-Deficiency Act, which essentially makes it illegal for an agency to spend money it doesn’t. has not.

As a result, Bergeron is concerned, he said, that the policy could lead to legal challenges from student loan managers, lenders and other entities involved in the loan process, as the cancellation could be considered a prohibited hold under the Constitution. If politics did not stand up in court and the debt was eventually restored, Bergeron said he feared borrowers would be harmed.

“There are a lot of people who might dispute that, [so] it is prudent for the Biden administration to take the time necessary to examine the matter, ”he said. “I would say the most important thing is to win Georgia, so that the Democrats control the Senate and then it can be done through legislation.”

Biden has previously indicated that he is open to canceling some student debt. During his presidential campaign he proposed to “Immediately cancel a minimum of $ 10,000 of student debt per person”. Biden reiterated the need to “immediately” forgive $ 10,000 in student debt when he introduced Miguel Cardona as his candidate for secretary of education on Wednesday, although Biden framed him as part of a “legislative plan.”

Alexis Goldstein, senior policy analyst at Americans for Financial Reform, a coalition of consumer, labor and other groups, said she placed more importance on what Biden campaigned on and wrote about than in comments made to a columnist.

Nonetheless, “it is obviously disheartening to hear him express some uncertainty about legal authority,” said Goldstein, whose organization was part of a group of more than 200 organizations urging Biden to use his authority to cancel student debt on the first day of his administration.

“The legal authority is very clear,” Goldstein said. “It’s documented.

Natalia Abrams, executive director of Student Debt Crisis, an advocacy group, said that despite Biden’s comments on Wednesday, “the fight is not over” for widespread student debt cancellation through executive action.

Indeed, it appears members of the Biden administration find politics appealing. Bharat Ramamurti, a longtime aide to Warren whom Biden recently appointed to his National Economic Council, called cancellation of student debt by decree “good economy and good policy”.

Biden’s recent comments come the same week Congress did not extend the coronavirus payment hiatus on student loans as part of his $ 900 billion stimulus package (which itself was questioned at the last minute by Donald Trump). Lawyers had said that Congress’s failure to act on the student loan issue has heightened the urgency for the Biden administration to act boldly after the inauguration.

“I feel the borrowers are worried that they will be forgotten again,” Abrams said. “With the CARES Act, this is one of the first times that borrowers have felt included in emergency relief, and we want to make sure it wasn’t just on time.”

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