Aug 31, 2022

Is student debt cancellation legal?

Is student debt cancellation legal?
Photo by Adam Szuscik / Unsplash

We looked at the merits. But what about the law?

I’m Isaac Saul, and this is Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today's read: 12 minutes.

We already examined the merits of student debt cancellation. Today, we explore the question of whether it is legal. Plus, a reader question about electric vehicles.

Photo by Adam Szuscik / Unsplash

Quick hits.

  1. Some 180,000 residents in Jackson, Mississippi have lost access to reliable running water “indefinitely” due to excessive flooding. The governor has declared a water emergency. (The emergency)
  2. Texas health officials are investigating the first possible death in the U.S. from monkeypox in an immunocompromised patient. (The death)
  3. In a new court filing, the Justice Department cited efforts to obstruct the probe at Mar-a-Lago, and shared photographs of cover pages of clearly marked classified documents found in Trump’s residence. (The filing)
  4. NASA will re-attempt the launch of its Artemis 1 mission on Saturday after Monday's launch was canceled due to engine cooling issues and a fuel leak. (The re-launch)
  5. Mikhail Gorbachev, the former Soviet leader, died at the age of 91. He won the Nobel Peace Prize for helping end the Cold War. (The death)

Our 'Quick Hits' section is created in partnership with Ground News, a website and app that rates the bias of news coverage and news outlets.

Today's topic.

The legality of student debt forgiveness. In May, we covered the initial arguments about forgiving student loans. Last week, we covered the arguments about the specific student debt plan announced by the Biden administration. But in both of those pieces, we focused mainly on the merits of the plan: Should the government be forgiving this debt? Were the targeted borrowers the right recipients? Will it worsen inflation? Is the plan a net positive for the country? All of the arguments we covered focused on questions like those.

Today, we are going to explore another thread of the student debt cancellation: Is it actually legal? And will it hold up in court?

Before President Biden released the plan, both he and House Majority Leader Nancy Pelosi (D-CA) had cast doubt on whether he had the power to cancel student debt. In July of 2021, Pelosi said "people think that the President of the United States has the power of debt forgiveness. He does not. He can postpone, he can delay, but he does not have that power. That has to be an act of Congress."

Early on in Biden's presidency, he too was hesitant about whether he had the authority. He asked the Education Department to explore the question, and they came back with an argument that he had the legal authority to cancel the debt, articulated in an Education Department memo saying "We have determined that the Higher Education Relief Opportunities for Students ("HEROES") Act of 2003 grants the Secretary authority that could be used to effectuate a program of targeted loan cancellation directed at addressing the financial harms of the COVID-19 pandemic."

The memo explains that the HEROES Act provides "broad authority to grant relief from student loan requirements during specific periods (a war, other military operation, or national emergency, such as the present COVID-19 pandemic) and for specific purposes (including to address the financial harms of such a war, other military operation, or emergency)." That authority has been used under every administration since its passage to provide relief to borrowers for various reasons.

Many have since speculated that the debt forgiveness will not survive scrutiny in court. However, one big challenge is finding a plaintiff who can prove concrete harm was done to them. Some legal analysts have speculated that nobody has standing to file suit against loan cancellation for this reason, and because they would also have to show that blocking forgiveness would remedy that harm. Under Supreme Court precedent, simply being a taxpayer isn’t standing to sue on its own. The most likely plaintiff would be a loan servicer, though courts have generally not allowed contractors to sue over federal regulations that hurt their bottom lines. This has left Republicans looking for a plaintiff to bring a suit.

Today, we'll examine some arguments about Biden’s legal authority with opinions from the left and the right, then my take.

What the right is saying.

  • The right mostly argues that the order is illegal, though some suspect it might hold up in court.
  • Some argue that Biden is clearly misusing the initial legislation for something it was never intended to cover.
  • Others say the administration's talking points are based on a lie.

In National Review, Charles Cooke called Biden's legal argument "cynical and ludicrous."

"There is no point in our mincing words. This is a lie. A contrivance. A game. Nobody believes this. It’s an excuse. If it makes it to the Supreme Court, it will lose, and it will deserve to lose. It is facially farcical. Of course 'The HEROES Act, first enacted in the wake of the September 11 attacks' does not convey this authority, as the memo claims. At no point, until today, had a single person in America ever believed such a thing. They shouldn’t now," he wrote. "When criticizing Donald Trump for making an end run around the legislature [for his border wall] in 2019, I wrote that: 'To permit presidents to circumvent quotidian policy disputes by appealing to a phantom Too Important Clause is to tear up James Madison’s Constitution and to sanction an alternative settlement within which any sufficiently frustrated executive is able to delve deep into the statutory well and find a watery justification to get his way.'

"This rule applies just as much to Joe Biden," he said. "Indeed, given the scale of what Biden is doing, which is more than 100 times as expensive, and far less legally debatable, it applies more so. Joe Biden does not actually believe that he has this authority. Rather, Joe Biden has decided to violate his oath of office, and, in an attempt to cover it up, he has asked his lawyers to scour the statute books and to find any pattern of words that might plausibly serve to convince the partisans in the press that he is acting within the law."

In Reason, Damon Root said Biden is using the HEROES Act for something other than its purpose, but the text is broad and presidents get a lot of judicial deference.

"Typically, an action of this sort would be performed by Congress, not the president… So where does Biden purport to get the authority to do this and will his legal justifications hold up in court?" Root asked. "Basically, the HEROES Act was designed to let the executive branch ameliorate the student loan situations of service members fighting the war on terror. In other words, Biden is invoking a post-9/11 expansion of executive power to justify his current actions... I would not underestimate the high amount of judicial deference that presidents tend to get from federal judges when they claim to be acting in the name of national security or claim to be dealing with a national emergency.

"What is more, the text of the HEROES Act does seemingly grant broad emergency powers to the executive, and it does so not just during wartime," Root said. "It authorizes the Department of Education to 'waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Higher Education] Act as the Secretary [of Education] deems necessary in connection with a war or other military operation or national emergency.' (Emphasis added.) Should Biden's plan ever land in federal court, one of the big questions for the judiciary will be whether the COVID-19 pandemic qualifies as a national emergency for the purposes of the statute. Plenty of federal judges may be willing to give Biden the leeway he wants here, including some Republican appointees on the current Supreme Court."

In Politico, Rich Lowry said the cancellation could and should end up in court.

"It is telling that when Congress passed this act nearly 20 years ago after the 9/11 attacks and George W. Bush signed it into law, no one thought Washington had created the predicate for a sweeping imposition of debt forgiveness by the executive branch," he wrote. "The act passed the Republican House 421-1 and the Republican Senate by unanimous consent, not the usual legislative path for measures allowing for a student-debt jubilee.

"Who are the 'affected individuals' under the HEROES Act? It is clear they are not supposed to be the entire population," he wrote. "As a summary of the legislation at notes, they are active-duty military personnel, National Guard troops, someone residing in a disaster area or someone who 'suffered direct economic hardship as a direct result of a war or other military action or national emergency.' Congress was clearly seeking to hold harmless the Marine with student loans who might in the years ahead be spending significant time overseas in combat zones... It simply can’t be true that everyone covered by the Biden program was a loser from the pandemic, though."

What the left is saying.

  • The left argues that Biden has the authority to cancel student debt, but it may end up in court anyway.
  • Some say Republicans' own legislation proves Biden has this authority.
  • Others note that finding a valid plaintiff will be difficult or impossible.

In The American Prospect, David Dayen said Republicans have admitted Biden has the authority to cancel student loans.

"Five Senate Republicans confirmed that President Biden has the authority to suspend, defer, or cancel student debt, when they filed a bill on Wednesday to block Biden from carrying that out," he wrote in April. "The bill, known as the Stop Reckless Student Loan Actions Act of 2022, would make direct changes to one of the statutes Biden can use for the purposes of debt cancellation or deferral. It also states that the executive branch may not 'suspend or defer' student loan payments for longer than 90 days or for individuals who make more than 400 percent of the poverty line. The executive branch, under the bill, also may not 'cancel the outstanding balances,' whether as part of a declared emergency or 'through any type of executive or regulatory action.'

"There would be no need for such a bill if there was not already authority granted by Congress to the executive branch to suspend, defer, or cancel student loan payments. The bill represents an effort to claw that authority back, or at the very least clarify the statute to remove all doubt," he wrote. "The bill begins by finding that the executive branch has 'abused' authority provided under the HEROES Act of 2003, an amendment to the Higher Education Act intended to help military service members, to pause student loan payments for more than two years. This is actually a criticism primarily of the Trump administration, which used the HEROES Act to justify its enactment of a payment moratorium."

In Slate, Mark Joseph Stern argued that there is a lot of precedent for what Biden did.

"To understand where this is going in the courts as well as the likely workaround, recall a basic fact that many critics of Biden’s program do not appear to understand: The federal government forgives student loans all the time," he wrote. "Before Wednesday, the administration had already approved $32 billion in student loan relief for more than 1.6 million borrowers. These actions did not provoke substantial controversy or litigation. Nobody raised a legal challenge when Biden canceled $5.8 billion in student loans for more than 323,000 disabled borrowers. Nobody raised a legal challenge when Biden announced rolling loan forgiveness for borrowers who entered public service—a plan that has already granted $10 billion in debt relief to more than 175,000 borrowers.

"The Department of Education has tackled so much student debt already because Congress gave it a number of tools to do so. One of those tools is the Heroes Act, passed in the wake of 9/11," he said. "This law gives the secretary of education authority to 'waive or modify' any provision of the law applicable to student aid programs 'in connection with a war or other military operation or national emergency.' (Emphasis mine.) The secretary may exercise this power to 'ensure' that borrowers 'are not placed in a worse position financially' in relation to their loans because they were 'affected' by the emergency. A 'national emergency' is defined as any national emergency declared by the president. The ongoing COVID-19 pandemic surely qualifies, since Donald Trump declared it a national emergency and Biden has extended that declaration."

In The New Republic, Matt Ford said despite so many people crying foul, nobody has actually sued the Biden administration.

"So why hasn’t anyone hauled the Biden administration into court to stop it?" he asked. "One problem for any potential lawsuit is finding a plaintiff for it. Time magazine reported this week that conservative legal activists are currently searching for someone who might have standing to challenge the order in court. But that requires someone who suffered some kind of legally cognizable injury from Biden’s order. The debtors themselves aren’t good candidates. For one, nobody with student loans is going to sue the Biden administration so that they pay more of them. And even if they did, it would be strange to argue that loan forgiveness is an 'injury' in any sense of the word.

"Time, citing conservative lawyers, floated some hypothetical litigants who might be able to bring a challenge. Among the prospective plaintiffs are student loan servicers, which act as middlemen between the federal government and the debtors themselves," he said. "It’s unclear how they would be injured in any way by this particular change in federal regulations. Another alternative offered by the magazine would be a borrower who makes more than $125,000 a year and therefore doesn’t qualify for the order’s relief. Means-tested programs have generally survived such scrutiny before—there would be little incentive to keep means-testing benefits if they hadn’t. It was also suggested that one of the chambers of Congress could have standing to challenge it. But that would require Republicans to win control of one of them first."

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. It is meant to be one perspective amid many others. If you have feedback, criticism, or compliments, you can reply to this email and write in. If you're a paying subscriber, you can also leave a comment.

  • The idea that this is legal because of Covid-19 is hypocritical and hard to believe.
  • Clearly, Biden is extending the reach of the HEROES Act in a way it was never intended.
  • However, given the text of the statutes and the plaintiff problem, none of this necessarily means it will fall.

I'm trying to separate my feelings from the text on this one. As I wrote last week, I think the student debt forgiveness plan was overly broad and ill-timed. I took a pretty clear stance against it, though I do believe debt cancellation can be an effective and just economic stimulus in certain contexts.

The question of its legality is much trickier.

For starters, it seems clear to me that Biden is using the HEROES Act in a context that Congress didn’t intend. If the executive branch expanding the meaning of something passed by the legislative branch matters to you, which it should, then it is quite easy to consider this an overstep. When Congress passed the HEROES Act, its intent was very clear: Make it easier on soldiers being deployed overseas, or people impacted by natural disasters, to get relief from their student debt. On the other hand, maybe you believe laws should regularly pertain to things the legislators didn’t intend. Which is why we have a court system to adjudicate.

But applying the justification of the HEROES Act to this situation gets tricky. In simple terms, the bill was supposed to target "affected individuals" who were "placed in a worse position financially" due to how they were impacted by serving overseas or surviving some kind of national emergency. For the Biden administration to justify cancellation under these terms, it seems to me they need to clearly define who the affected people were and then help them. Surely, not everyone with student debt who made less than $125,000 in 2020 and 2021 is now worse off financially because of the pandemic. Some are very obviously doing better.

What makes this even trickier is that it wasn't Biden who initially broadened the use of the HEROES Act; it was Congress and President Trump. The Trump administration used the HEROES Act to suspend all student debt payment in the early stages of the pandemic, and got very little resistance. It also — via Education Secretary Betsy DeVos — tried to make it clear on the way out that canceling student debt was not something they believed they had the power to do. So they tried to walk a line: Yes, we can suspend student debt payments for a broad swathe of the populace. No, a future administration cannot cancel those payments.

As is the trend in our country's history, when the executive branch gets its hands around any kind of power, it typically tries to expand that power. This is why so many conservatives rightly resist certain small advances of executive power — because they understand that those small advances usually blossom into something much larger.

Enter Biden.

To me, it is blindingly obvious that there was more justification for suspending student loan payments under the auspices of a national emergency — which Covid-19 clearly was in 2020 and 2021 — then there is for canceling that debt now. Remember, the Biden administration has argued in court that Covid is contained enough to end Title 42, the Trump-era border policy to quickly expel migrants, while it now argues that Covid gives it the authority to cancel hundreds of billions of dollars of student debt. The contradiction is clear.

Yet none of this means that it will fall in court. As far as I can tell, the plaintiff issue is a huge problem for Republicans who want to block the order, and I imagine if it were easy to find someone to sue they would have done it months ago. Furthermore, the reality is that Congress and Trump did, in fact, help expand the precedent of what the HEROES Act could be used to do, and there will surely be some judges who view that argument favorably. If it does go to court, one potential outcome is that the Biden administration is forced to more narrowly define the cohort of borrowers damaged by the pandemic, which thins the pool of people who qualify for debt relief. There could certainly be worse outcomes than that.

So in brief: I think Biden is exceeding his authority and misusing a 20-year-old bill for something it was never intended for, but he is also hardly the first president (or member of Congress) to expand that law's reach. It seems Republicans realized the door was open for this a little too late, and their failed attempt at passing a bill to change the HEROES Act is a giveaway they understood this order might hold up. Because the original text of the statute was so broad and finding someone to bring suit will be so difficult, I wouldn't be surprised if debt cancellation survives any imminent legal challenges.

It's one of those bizarre situations where something feels obviously out of bounds of the law, but benefits from being well executed with just enough of a textual bulwark to survive.

Your questions, answered.

Q: In all the discussion around EVs, no one has focused on the lingering problem they will cause: disposal of dead batteries. Currently the batteries only last for 50-70k miles, and cost $20k to replace. What are we going to do with the heavy metals and toxic elements in the worn-out batteries, put them in landfills?

— Anonymous, Gravois Mills, MO

Tangle: On the contrary, I think a lot of people are worried about this. This is a fundamental problem that Scott Tinker discussed in his interview with me when he argued that "renewable energy" is not really renewable. The number of dead, toxic batteries we'd have to dispose of is unfathomable. And we aren't talking about toaster oven sized car batteries, we're talking about batteries — like those in the Chevy Bolt — that weigh 960 pounds and run the entire wheelbase of the car.

For whatever it’s worth, I think your figures on range and cost are outdated: Most electric vehicles have warranties that guarantee 100,000 miles or eight years of use, so they are betting on far more than 50,000 to 70,000 miles. Temperature and use matter a lot, but quite a few EV batteries are lasting 100,000 to 200,000 miles now. And $20,000 for a replacement is the highest end I can find. The cost to replace a Chevy Bolt battery is $9,000, and costs of batteries have dropped 80% in the last ten years.

In California, part of their new law is going to require batteries to maintain 70% of their health for eight years or 100,000 miles, and also to be clearly labeled with what they are made of to aid in battery recycling. I don't think that's a fix, per se, but it points to an industry that understands it has a huge environmental problem on its hands. When GM had to recall thousands of its Chevrolet Bolts, it became clear they didn't really have a plan for what to do with the batteries.

But as I said, a lot of people are thinking about this. Firms are racing to create a "circular economy" of batteries that recycles old ones, refurbishes them with limited materials, and gets them back into new cars. I think that’s the most likely outcome: Reuse. Companies from Nevada, Europe and Toronto are already competing to solve the problem. There's no doubt our current process for disposing of toxic old batteries (which also cause fires) won't work. But there are definitely a lot of bright minds working to address it.

Under the radar.

Inflation and labor shortages are pushing wages up faster than anyone may have thought a decade ago, Axios reports. $20 an hour is the new $15 an hour. According to new data from Indeed, more job searchers are looking for gigs that pay $20/hour than $15/hour, a sign workers are expecting a major pay bump to match worker demand and inflation. In California, a bill to bump fast food workers to $22 an hour just passed the Senate, and the folks behind the "Fight for $15" movement are now encouraging states who adopted a $15 minimum wage to bump it up again. Axios has the story.


  • 76. The new life expectancy in the U.S., the lowest it has been since 1996.
  • 20%. The proposed staffing cut being made by Snap Inc., the company behind Snapchat.
  • $7.39 billion. Disney parks revenue in the second quarter of 2022.
  • $6.58 billion. Disney parks revenue in the second quarter of 2019.
  • 3%. The decrease in median income of lower income households between 2019 and 2020.
  • 2.1%. The decrease in median income of middle income households between 2019 and 2020.

Have a nice day.

You have probably heard about how the social fabric in America is disintegrating, but new data from the American Psychological Association suggests something else. Since the 1950s, cooperation between strangers has steadily increased in the United States. "Over 63,000 people participated in 511 studies that were carried out in the US between 1956 and 2017 that were analyzed by the researchers. These studies included lab tests that evaluated strangers’ cooperation," SciTech Daily reports. "The study discovered a slight, gradual rise in collaboration over the period of 61 years, which the authors believe may be related to significant changes in American society." Researchers say they were surprised and delighted by the results. Sci Tech Daily has the story.

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Isaac Saul
I'm a politics reporter who grew up in Bucks County, PA — one of the most politically divided counties in America. I'm trying to fix the way we consume political news.