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Biden’s Student Loan Cancellation Is Illegal, Critics Say

  • President Joe Biden is planning to cancel $10,000 in federal student loan debt for millions of Americans.
  • Not all legal experts believe this action is legal, though challenging it in court may prove difficult.
  • “They’ve come up with a little window dressing to make it sound legal,” Heritage Foundation senior legal analyst Jack Fitzhenry told the Daily Caller News Foundation. “If it manages to get into court, I have serious doubts that it survives.”

President Joe Biden’s move to cancel thousands of dollars in federal student loan debt may be against the law, according to detractors.

Biden announced plans Wednesday to provide up to $10,000 in student loan debt cancellation to people making under $125,000 and erase a maximum of $20,000 in such debt for Pell Grantees below that income threshold. A variety of critics question whether he has the legal authority to do so.

The Justice Department issued a Tuesday legal opinion contending the Education Secretary had power under the 2003 HEROES Act “to reduce or eliminate the obligation to repay the principal balance of federal student loan debt, including on a class-wide basis in response to the COVID-19 pandemic, provided all other requirements of the statute are satisfied.”

George Washington University law professor Jonathan Turley told the Daily Caller News Foundation he considered this use of the HEROES Act “dubious and transparently opportunistic.”

“While the Biden Administration might have some early success with a lower court judge, it will face a chilly reception on the Supreme Court,” he said. “President Biden has been a constitutional recidivist in executive overreach in a series of major court losses.  The authority cited is highly challengeable. To assume such a massive power to excuse as much as $500 billion, that authority should be both express and clear. It is not.”

Heritage Foundation senior legal policy analyst Jack Fitzhenry expressed personal disbelief that the student loan debt cancellation is legal.

“They’ve come up with a little window dressing to make it sound legal,” Fitzhenry told the DCNF, referencing the Education Department Legal Counsel Lisa Brown’s Tuesday memo arguing in the cancellation’s legal favor based on the HEROES Act. “If it manages to get into court, I have serious doubts that it survives.”

“[The Act] makes some provision for emergency powers in a case of national emergency, and in a technical sense the pandemic remains an ongoing emergency” he said, “But I think after you concede some of those general premises they get on less sure footing.”

Job Creators Network President CEO Alfredo Ortiz announced his group’s Legal Action Fund was weighing options for blocking Biden’s student debt action.

“This executive overreach transfers taxpayer dollars from hardworking ordinary Americans and small businesses to disproportionately higher earners with college degrees,” Ortiz said.

“This administration is exceeding its legal authority and illegally burdening hard-working Americans with debts they didn’t take on themselves,” Republican Texas Sen. Ted Cruz similarly argued in a press release. “Let’s be clear – there is no way to ‘cancel’ student debt. This will cost every taxpayer an average of $2,100. Someone will pay the price for this policy and the price is likely to be felt by every American in the form of even higher inflation.”

House Speaker Nancy Pelosi had stated last July that Biden could not single handedly forgive student loan debt, adding, “That’s not even a discussion,” according to CNBC.

Columnist Carrie Sheffield published an opinion piece with the DCNF prior to Biden’s Wednesday announcement, saying his move to cancel student loans was “likely illegal and definitely will increase inflation and force poor people to subsidize rich people.”

Some have suggested Biden’s cancellation acts may not be overturned even if they are illegal. University of Virginia J.D. candidate Jack Hoover argued in the Virginia Law Review earlier this year that there may be no one eligible to bring a lawsuit over executive action cancelling student loan debt, preserving it from court challenges despite any legal flaws.

Fitzhenry called this a “real practical possibility in this case.”

“I wouldn’t go so far as to say that nobody has standing,” he told the DCNF. “I think that parties who may be inclined to challenge it are going to have to articulate rather clearly why they have a concrete, particularized injury that’s traceable to this executive action.”

Fitzhenry said he suspects student loan servicers would be most legally fit to bring such a challenge.

“They’re going to be among the least sympathetic plaintiffs, but from a purely legal perspective they would seem to have one of the better arguments for why the executive action here has caused them real particular harm,” he suggested.

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