Here’s the redacted memo on student loan forgiveness that could determine if President Joe Biden cancels student loans.
Here’s what you need to know.
Student Loans
A new Freedom of Information Act request has revealed a heavily-redacted memo on the president’s legal authority to cancel student loans unilaterally. The seven-page memo is titled “The Secretary’s Legal Authority for Broad-Based Debt Cancellation,” is addressed to U.S. Secretary of Education Miguel Cardona, is written by the acting general counsel of the U.S. Department of Education, and is dated April 5, 2021. Here’s what happened and here’s what it means for your student loans.
Student loan forgiveness: what is this memo?
In April, White House Chief of Staff Ron Klain said the president asked the U.S. Department of Education to conduct a legal review of the president’s ability to cancel student loan debt unilaterally without further authorization from Congress. Klain said the review would take several weeks. However, seven months later, neither the White House or the Education Department has released the full memo. The memo on student loan cancellation could include the following:
- the president’s legal authority to enact student loan cancellation by executive order without further authorization from Congress;
- recommendations to forgive student loans, including how and when;
- alternative strategies to give student loan relief after expiration of temporary student loan forbearance from the Cares Act;
- the arguments for and against student loan debt cancellation;
- how much student loan debt, if any, to cancel;
- who may qualify for student loan cancellation; and
- how wide-scale student loan cancellation will relate to targeted student loan cancellation.
Last month, Rep. Ilhan Omar (D-MN) and others called on Biden and the White House to release the memo on student loan cancellation, but that hasn’t happened.
Student loan cancellation: what this means for your student loans
As first reported by the New Yorker, Debt Collective — a membership-based union — obtained the redacted documents from the U.S. Department of Education through a Freedom of Information Act request. According to the documents, the memo on student loan forgiveness may have existed since February 2021 and an updated draft may have been completed in early April 2021. (You can read the full redacted memo and emails here). Based on these documents, Debt Collective and others have made several claims about the memo on social media and what it means for your student loans. Here is a snapshot of those claims and what they really mean for your student loans:
Claim #1: A memo on student loan cancellation has existed since April and possibly early February.
The documents shows a redacted memo from April with the title “The Secretary’s Legal Authority for Broad-Based Debt Cancellation.” The documents also reference updating a memo from February. Importantly, the memo is redacted so there is no way at this point to know the contents of this apparent memo. It’s not surprising if the Education Department has explored this topic in April, February or an earlier date. It’s also likely the Biden campaign examined the issue of mass student loan cancellation, which suggests there may be prior analyses over the past several years. (Here’s who qualifies for student loan forgiveness right now). The Trump administration explored this topic too and concluded that the president does not have unilateral, legal, executive authority to cancel an unlimited amount of student loan debt.
Claim #2: The title of the apparent memo “clearly suggests the White House know Biden has the authority to cancel student loan debt”
The title of the memo — “The Secretary’s Legal Authority for Broad-Based Debt Cancellation” — is just that, a title. The memo’s title doesn’t say that the Secretary of Education has the legal authority to cancel everyone’s student loan debt. Rather, the memo’s title is simply the topic itself, not a conclusion. (Student loan forgiveness won’t be available to these student loan borrowers).
Claim #3: The White House is playing politics
Debt Collective and other say that the White House has delayed the release of this memo on wide-scale student loan forgiveness, and it all comes down to politics. However, it’s unclear if there is a final memo. There’s no evidence that the Biden administration has been sitting on a memo for months while student loan borrowers and Congress await the Education Department’s conclusions. (Here’s how to get student loan forgiveness if you don’t work in public service). As noted, the Trump administration concluded the president doesn’t have legal authority to cancel everyone’s student loan debt without further authorization from Congress. That’s also the mainstream conclusion as well based on the U.S. Constitution and the Separation of Powers clause. Speaker of the House Nancy Pelosi (D-CA) has said the same, and Biden has said repeatedly that he doesn’t believe he has authority to cancel student loan debt without Congress. In a town hall event last month, Cardona said that “conversations are ongoing” about student loan forgiveness. We’re going to continue conversations around loan forgiveness — broad loan forgiveness.” (Student loan forgiveness may still be alive). Therefore, according to the Secretary of Education, the White House and Education Department are still exploring student loan forgiveness and work hasn’t concluded. Therefore, it wouldn’t appear that the Biden administration is playing politics with student loan forgiveness.
Claim #4: “We don’t need and never needed a memo to tell us something we have known for years. Biden now needs to eliminate all student debt with his executive authority.”
It’s not a slam dunk that Biden has existing executive authority to cancel everyone’s student loan debt. (That said, Biden announced these major changes to student loan forgiveness). The phrase “Biden can do it with a flick of a pen” can be repeated on television, in print and in social media as often as you’d like. However, it doesn’t change the law or mean that Biden will suddenly cancel everyone’s student loan debt. You’re better off assuming it won’t happen and then be pleasantly surprised if it does. A memo is non-binding; it carries no legal muster. The president can follow the recommendations of the memo, or he can reject the recommendations in part or categorically. As Congress and the White House know, any attempt to cancel everyone’s student loan debt would be met with legal challenges that would likely delay the implementation of any wide-scale student loan cancellation for months, if not years. A court likely would make the final determination on the president’s legal authority to act unilaterally without Congress to enact mass student loan cancellation. That’s likely one reason why Biden has focused on targeted student loan cancellation. Biden has now cancelled $11.5 billion of student loans since becoming president.
Student loans: next steps
The Education Department may or may not release the memo on student loan cancellation. The Education Department can accept or reject the conclusions that the Trump administration reached. The president can accept or reject the Education Department’s recommendations. The Biden administration has been cancelling student loans at an unprecedented clip. The amount of student loan cancellation may be significantly more or less than you prefer, but there is no current indication that Biden plans to cancel everyone’s student loan debt. Biden has never supported that proposal nor has Senate Majority Leader Chuck Schumer (D-NY) or Sen. Elizabeth Warren (D-MA). The bottom line: don’t expect mass student loan forgiveness. The Biden administration will continue to cancel student loans — perhaps billions of dollars more — but it may not be yours.
That’s why it’s imperative that you have a clear game plan to pay off student loans. Make sure you know all your options, including these smart ways to pay off student loans:
Student Loans: Related Reading
Here’s who qualifies for student loan forgiveness right now
How to get approved for student loan forgiveness
Student loan forgiveness won’t be available to these borrowers
How to get student loan forgiveness
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November 02, 2021 at 09:16AM
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Here’s The Redacted Memo On Student Loan Forgiveness That Could Determine If Biden Cancels Student Loans - Forbes
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