With opponents expected to file lawsuits, the Justice Department has released a legal opinion covering the justification for Biden’s debt relief program.
WASHINGTON — President Joe Biden’s student debt relief program announced Wednesday delivers on a long-awaited campaign promise, offering up to $10,000 in loan cancellation for many Americans — and up to $10,000 more for those with the greatest financial need
But how is he able to do it, and most importantly what legal challenges could the program face?
The Justice Department released a legal opinion on Wednesday saying that the Higher Education Relief Opportunities for Students Act allows the Secretary of Education the “authority to reduce or eliminate the obligation to repay the principal balance of federal student loan debt.”
Also known as the HEROES act, the legislation is a post-9/11 law that provides the authority to grant relief from student loan requirements during specific periods, such as a war or national emergency.
According to the Biden administration’s legal opinion, the Secretary of Education has used the authority granted by the HEROES act under every prior administration since its passage after the September 11 attacks.
The current payment pause on student loans enacted during March 2020 is allowed under this law.
Under this authority, the Biden administration said it is able to develop a program tackling categorical debt cancellation directed at “addressing the financial harms caused by the COVID-19 pandemic.”
The legal opinion also upheld that a relief program wouldn’t need to be “on a case-by-case basis,” but rather can be applied on a “class-wide basis.”
The White House is expected to face lawsuits over the plan, because Congress has never given the president the explicit authority to cancel debt. We don’t know yet how that might impact the timetable for student loan forgiveness.
If his plan survives legal challenges that are almost certain to come, it could offer a windfall to many in the run-up to this fall’s midterm elections. More than 43 million people have federal student debt, with an average balance of $37,667, according to federal data. Nearly a third of borrowers owe less than $10,000, and about half owe less than $20,000. The White House estimates that Biden’s announcement would erase the federal student debt of about 20 million people.
The Associated Press contributed to this report