Dems Say Biden Could Use Executive Authority on Student Loan Overhaul. But Will He?

By Owen Daugherty, NASFAA Staff Reporter

President Joe Biden takes office with a long list of legislative priorities and a razor-thin Democratic majority in both chambers of Congress. But if Congress is unable — or unwilling — to aid Biden in accomplishing major portions of his election platform, some have argued he could look to sidestep the legislative process and use executive authority to enact a few of his more notable campaign proposals related to higher education and the federal student loan program specifically.

But as the Biden administration takes shape, two questions remain surrounding the idea of “legislating” through executive action: Will he use it? And exactly how far can he go?

Biden’s propensity to wield his executive authority from the Oval Office could have a major impact on the timing and significance of moves intended to reshape the country’s higher education landscape and provide relief to borrowers reeling from the effects of the pandemic.

Throughout his presidential campaign, Biden vowed to use executive authority to undo a number of former President Donald Trump's policies. In fact, on his first day in office Biden signed more than a dozen executive orders and other directives, followed by several more planned in the coming days. Biden’s flurry of executive orders in his first few days in the White House follows the heightened use of the authority by his predecessor and the growing use of the power by recent presidents, dating back to Bill Clinton.

One of the early questions is whether Biden will attempt to utilize executive authority to provide widespread student loan debt cancelation to millions of borrowers. Any mention of canceling some amount of federal student loan debt was noticeably absent from Biden’s recently released pandemic relief proposal, his administration’s first pitch to Congress as a response to the pandemic.

Some took the absence of debt forgiveness as a sign that it is increasingly unlikely that Biden will exercise his executive authority to cancel some amount of federal student loan debt for borrowers in the coming weeks or months. However, Biden did already instruct the Department of Education (ED) to extend the suspension of federal student loan payments and interest accrual through September 30. 

But others see the absence of the student loan forgiveness in the stimulus proposal as evidence that Biden can act unilaterally, as more than 300 organizations have called on him to do. 

While Biden has expressed a desire to provide relief for borrowers, in recent weeks he and top aides have suggested he’s reluctant to wipe away debt without an act of Congress. David Kamin, Biden’s deputy director of the National Economic Council, said Biden “supports Congress immediately canceling $10,000 of federal student loan debt per person as a response to the COVID crisis.”

Biden’s education secretary nominee Miguel Cardona said in an interview he supports Biden’s plan to provide debt relief to borrowers and would “work with our senators and our Congress-folks to support a plan that provides some relief to our students in higher education.”

However, should Congress stymie Biden’s request, influential lawmakers say executive action may be the best route to accomplish his priorities. Rep. James Clyburn (D-S.C.), who backed Biden early in his primary campaign and has said he supports wiping away as much as $50,000 in student loan debt for each borrower, has been vocal about his desire for Biden to enact his agenda through executive authority if other methods fail.

"When [Biden] lays out his agenda and invites participation from the other side, if they're going to be recalcitrant, if they're going to throw up roadblocks, go on without them. Use your executive authority if they refuse to cooperate," Clyburn said recently.

Beyond the question of whether Biden will use his executive authority to wipe out some amount of student loan debt for millions of borrowers is the argument of whether he even has the legal authority to do so. 

Advocates, including Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.), point to language in the Higher Education Act (HEA) that they say gives Biden the authority to issue widespread student loan debt cancelation without Congress.

“They assert that the president, or more accurately the Education Secretary, has the authority to forgive student loans by referring to the waiver authority in the HEA. And they take it out of context,” said financial aid expert Mark Kantrowitz.

The waiver authority says the education secretary, presumably directed by Biden, can compromise, or “cancel,” student loan debt. But it's taken out of context because it is ignoring the preamble, Kantrowitz explained, that effectively confines the waiver to acting within the statute as authorized by Congress.

Some have also pointed to the pause in payments and interest accrual on federal student loans amid the pandemic — enacted by the Trump administration — as a precedent to argue that ED under Biden can unilaterally cancel some amount of student loan debt, said Alexis Goldstein, a senior policy analyst at Americans for Financial Reform.

“As a part of that [payment] freeze, they didn't just cancel interest, but they also were counting non-payment towards Public Service Loan Forgiveness (PSLF) progress and income-driven repayment forgiveness,” she said. “That's essentially debt cancellation.”

Goldstein added that the pandemic has created a ground shift and changed the “bounds of what may have been perceived to be possible” regarding executive action and debt forgiveness.

But officials at ED under the Trump administration in their final days attempted to constrain the incoming administration’s ability to forgive outstanding student loan debt through executive action, arguing in a non-binding memo that the education secretary “does not have statutory authority to provide blanket or mass cancellation.” The memo described the department’s executive order to pause payments and forgive interest on certain federally-held loans last March at the onset of the pandemic as the “far outer boundary of its authority.”

Regardless of whether Biden chooses to go that route to fulfill one of his campaign promises, many expect that executive action tackling any amount of student loan debt forgiveness would likely face a lengthy legal battle.

“There are Republican members of Congress who have already basically indicated that they would file such a lawsuit,” Kantrowitz said.

And that underscores one of the primary issues regarding executive action: it has the tendency to create a back-and-forth where each administration uses the authority of the executive branch to undo the actions of its predecessor. 

“Executive action is easy come, easy go,” Kantrowitz said. “So if you want to make something a little bit more permanent, you get Congress to pass it.”

While it's unclear if a lawmaker would have the legal standing to bring a lawsuit, said Luke Herrine, a PhD candidate at Yale Law School who has written about the use of executive action on student loan debt cancelation extensively, it’s likely the move would face a legal challenge in some form — more likely from a loan servicer or debt collection agency since they are parties that could more easily prove an argument for having legal standing to challenge the order, he said. 

Herrine added that even if an executive order to cancel some amount of student loan debt is struck down in court, it could still be politically advantageous.

“If you believe in the importance of student debt cancellation, there's a reason to have the fight publicly,” he said. “Making the issue public and part of the conversation and putting yourself as a politician in front of the issue as somebody who's willing to fight, to do it in courts, is potentially a way to create momentum.”

There are a variety of other measures that garner less attention that Biden’s ED could use to reshape the federal student loan system. The department could quickly provide relief to tens of thousands of borrowers who were defrauded by their institutions by using its existing authority, a report from the National Student Legal Defense Network (NSLDN) argues.

Though rewriting the entire borrower defense rule will be a time-consuming process, ED could provide borrowers relief by extending closed school discharge eligibility periods and then, for students who attended institutions that closed between Nov. 1, 2013 and July 1, 2020, “provide the relief automatically without the borrower needing to apply,” the report states.

Additionally, Biden could instruct ED to no longer garnish the wages or Social Security benefits for borrowers who are in default on their loans, according to the same report. ED could also restructure PSLF, as Biden proposed during his campaign, and shorten the time period in which borrowers can obtain loan forgiveness through income-driven repayments plans, NSLDN laid out in its 100 Day Docket outlining immediate actions ED can take.

Herrine cautioned, however, that “it's much easier to use executive action to stop things from happening than to make things happen.” 


Publication Date: 2/1/2021

Joel T | 2/1/2021 4:0:55 PM

If, according to the Census Bureau, 22.5% of the total population above 25 have finished four years of college you have to ask yourself: Why should the 77.5% of the population that did not go to school pay off their debt? They received no benefit of the debt and they, likely, report to several of these people with degrees.

Further, I think it would call into question the legitimacy of the student loan program and higher education, in general, if every "X" number of years they have to be bailed out like Amtrak and the U.S. Postal Service. "Canceling student debt" is truly a fight that we should probably stay out of, to the best of our ability, and focus on what is driving up the cost and forcing students to take out student loans in the first place.

Robert W | 2/1/2021 8:40:52 AM

I apologize for leaving the m off am and capitalizing the W in why.

Bob W

Robert W | 2/1/2021 8:39:15 AM

I have several thoughts on this topic as I a sure everyine does. One is Why should we, the taxpayers be responsible for picking up the tab for the proposed loan forgiveness? Why shouldn't students who are not satisfied with the cost or quality of their education look to the school first, for some type of relief? Just my thoughts.

Bob Walker
Tupelo, MS

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