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Trump wrong on legal status of Biden's student loan write off: Education Dept

By Ashe O

Washington, Aug 28 (IANS): The US Education department, brain behind US President Joe Biden’s massive billion dollar write off program on student debt, pointed out it has proper legal status under the HEROES act and that former president Donald Trump was “substantively incorrect” questioning its legal status claiming it will add to budget deficit.

Right before President Biden announced this broad relief, his Education Department responded to the conclusion former President Donald Trump made in a January 2021 memo during his time in office: that the authority does not exist to cancel student debt for all federal borrowers.

“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 programme of targeted loan cancellation directed at addressing the financial harms of the Covid-19 pandemic,” the department’s General Counsel Lisa Brown said.

“We have thus determined that the January 2021 memorandum was substantively incorrect in its conclusions.”

Biden had announced at a White House press conference on Wednesday cancellation of student debt of $10,000 for an individual whose income is below $125,000 a year and $20,000 where spouse’s together income is less than $125,000 a year including Pelts grant.

Biden said: “All of this means people can start to finally crawl out from under that mountain of debt to get on top of their rent and their utilities, to finally think about buying a home or starting a family or starting a business.

“And, by the way, when this happens, the whole economy is better off.”

As Americans continue to return to the workforce more than two years after the pandemic began, it is time for borrowers to resume repayment of student debt obligations.

Taxpayers and working families should not be responsible for continuing to bear the costs associated with this suspension of repayment.

This common-sense legislation would protect taxpayers and prevent President Biden from suspending federal student loan repayments in perpetuity, some argued taking a different viewpoint.

For as long as student debt has been a burden for millions of Americans, there has been the question of how, and if, a president can legally wipe out some of what is now a $1.7 trillion crisis involving some 47 million borrowers.

President Biden’s administration on Wednesday decided that the authority is there, cancelling up to $20,000 in student debt for Pell Grant recipients and federal borrowers.

The HEROES Act gives the Education Secretary the authority to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” if the secretary finds waivers are necessary to ensure borrowers would not be placed in a “worse position financially” due to a national emergency, which in this case, is the pandemic, the education department opined.

However, Trump’s Education Secretary Betsy DeVos wrote in her memo that “Congress never intended the HEROES Act as authority for mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify repayment amounts or terms,” ultimately arguing any broad relief is overstepping Congress.

While DeVos’ memo be formally rescinded, there are still likely to be legal arguments down the road, and even lawsuits, as Biden’s student-loan forgiveness gets implemented, the Insider said

Biden himself had questioned the legality of student-debt relief at a point in time, says the Business Insider pointing to his campaign trail for presidency in 2020.

Biden pledged to approve $10,000 in student-loan forgiveness, but when it comes to amounts like $50,000 — which many Democrats were pushing for — he expressed hesitancy.

“My point is: I understand the impact of debt, and it can be debilitating,” Biden said during a town hall last year.

“I am prepared to write off the $10,000 debt but not $50,000, because I don’t think I have the authority to do it.”

That’s why he asked both the Education and Justice Departments to prepare memos assessing his legal authority to cancel student debt broadly.

In October 2021, redacted documents revealed that the Education Department was circulating a memo as early as April 2021.