Executive Action on Student Loan Cancellation Could Be ‘Legally Risky’ According to Former ED Official’s Memo
By Hugh T. Ferguson, NASFAA Senior Staff Reporter
A private memo has detailed the ways in which President Joe Biden’s consideration of canceling some amount of student loan debt could face a legal challenge over the use of executive authority, The Wall Street Journal reports.
The memo, according to the report, was put together by a former Department of Education (ED) official, Charlie Rose, a top departmental lawyer from the Obama administration.
Scoop: A private memo by Obama's top Education Dept. lawyer says that broad student loan forgiveness by executive action is legally risky: "the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation" https://t.co/IEkBy4Ee45
— Gabe Rubin (@Rubinations) May 4, 2022
The legal analysis suggests that the move to cancel student loan debt — without tying the relief to individual borrower needs or proceeding through some regulatory process — could enable loan servicing companies and investors that own securities backed by student loans to be in a position to sue the administration over broad-based debt cancellation.
It is unclear whether Rose’s analysis is the long-awaited memo that ED had put together outlining its potential authority to forgive student loan debt that the White House has had since April of last year.
Stay tuned to Today’s News for more details on the student loan landscape.
Publication Date: 5/5/2022
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