Biden's Student-Debt Rescue Plan Is a Legal Mess (or not)

[applegrove]

Biden’s Student-Debt Rescue Plan Is a Legal Mess

September 4, 2022 at 11:13 pm EDT By Taegan Goddard 8 Comments

https://politicalwire.com/2022/09/04/bidens-student-debt-rescue-plan-is-a-legal-mess/

"SNIP......

Jed Shugerman: “The Biden administration’s recently announced plan to reduce student debt for borrowers who earn less than $125,000 is popular, according to recent polls.”

“Unfortunately, the plan has a major legal flaw: The administration’s arguments for its executive power to make such a broad effort under federal law will likely lose—and should lose—in the courts. The good news, for President Joe Biden and for borrowers, is that the administration has time to change those arguments.”

......SNIP"

[yankee87]

1. Court case

Not sure on all the talk of this being unconstitutional from the right wing media. I believe President Biden has already has a team of lawyers to defend the bill.

[brush]

2. Not so fast. The Heroes act from 2003 covers them.

Let's get informed.

https://www.democraticunderground.com/100217089283

With all the discussion of President Biden's student loan forgiveness executive actions, it's important to be well informed to better address the inevitable criticism from all sides, including from those who claim that President Biden has no legal authority to forgive the loans and from others who mistakenly think that the action was taken through an executive order, complaining that the President either waited too long or overstepped his bounds of executive authority.

President Biden is using the legislative authority granted by Congress and encoded into statutory law to implement his loan forgiveness program.

===========================

Use of the HEROES Act of 2003 to Cancel the Principal Amounts of Student Loans

Headnotes: The Higher Education Relief Opportunities for Students Act of 2003, Pub. L. No. 108-76, 117 Stat. 904, grants the Secretary of Education authority to reduce or eliminate the obligation to repay the principal balance of federal student loan debt, including on a class-wide basis in response to the COVID-19 pandemic, provided all other requirements of the statute are satisfied.

[applegrove]

3. Good to know.

[GoodRaisin]

4. Thanks for posting. OP might want to edit the subject line, given that extra info.

[MichMan]

5. Wonder why people were saying the presidents authority was limited to $10k?

Is there any limit on how long the covid pandemic can be considered a national emergency? If not, it looks like solid legal authority to enact it multiple times until all debt is wiped out.

[kelly1mm]

8. I trust Speaker of the House Nancy Pelosi on this:

"Specifically, Pelosi said in July 2021 that "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."

[brush]

9. And an act of Congress is what the Heroes Act of 2003 is.

The president's debt forgiveness of student loans is based on that.

[kelly1mm]

10. Except that the Heros Act of 2003 was already in place when The Speaker made her statement. Are you

suggesting that the Speaker had no knowledge of the Heros Act when she made her statement? She voted for it in 2003 so I assume she read it and understood what it meant?

[brush]

11. I'm not suggesting anything but that the president's...

student loan forgiveness is based on the Heroes Act. Go to the link and read it for yourself.

[kelly1mm]

12. I have read it and I am doubtful that this USSC will find that the President has the authority

under the Heros Act of 2003 to forgive student loans due to COVID 19- just like the Speaker of the House Nancy Pelosi stated in 2021 - the President needs the congress to act. I trust Speaker Pelosi's instincts in this ..

[brush]

13. Is it not encoded law? Ya really don't know what SCOTUS will do...

months or a year or two from now if it ever even get to SCOTUS.

Time to stop being Dems afraid of their shadow because of what republicans might do.

Go, Dark Brandon.

[kelly1mm]

14. Oh I have a pretty good idea what the USSC will do. The debt forgiveness is likely to be

postponed pending litigation anyway so it is not like there will be actual loan forgiveness prior to the 2022 elections (and possibly not before the 2024 elections)

[brush]

15. That's just your opinion. And it has to get to SCOTUS...

first. In the meantime students will get some respite. I hope they do. You seem to not want them to. Do you feel the same way about PPP loans getting forgiven? Many republicans got them and are complaining about students getting a break.

Marg Taylor Greene for one got a PPP loan of 87m which was forgiven and she's complaining about students getting 10 or 20k of loans getting forgiven.

Talk about hypocrisy.

[kelly1mm]

16. I have no problem with student loan forgiveness so long as it is constitutional. I have

no skin in the game as I have no student loans. My problem is that MULTIPLE Democratic politicians including the Speaker of the House stated it could not be done without congress. Were they lying then or lying now?

[FBaggins]

20. No - it doesn't have to get to SCOTUS first

They just have to find a friendly district court in the 5th circuit to declare it unconstitutional. That court's injunction would have to be overturned before a dollar in debt could be forgiven.


Do you feel the same way about PPP loans getting forgiven? Many republicans got them and are complaining about students getting a break.

That's a lousy example. PPP was created with "forgiveness" in mind. They weren't really "loans" in the first place. That was just the fastest way to get the cash out to businesses during the early shutdowns from Covid.

[brush]

26. Well that has to happen. It hasn't happened and I hope...

the ones with the loans get some respite. And I myself paid off my loans and have no resentment from some people getting a break.

And I don't get why this sentiment is so prominent on DU. Joe is trying to do some good with this forgiveness.

[lostnfound]

21. 1) Who has the standing to bring a court case? 2) national emergency undefined

[DetroitLegalBeagle]

22. Standing is irrelevant if a court wants to hear it

Standing is just a convenient way for a court to decline taking up a case that they want nothing to do with. For cases they want to hear, they will use whatever reasoning they want in order to hear it. All the gop need to do is find a friendly court to challenge it in. Likely will be a 5th Circuit district that they challenge it in.

[kelly1mm]

24. 1) Loan Servicers 2) I am sure the USSC will define it for us ....... nt

[PortTack]

17. Thank you for the very complete answer. Was gonna say the same. This isn't just an EO, far from it

[Celerity]

6. If the banks (or other class of plaintiff) are granted standing, I truly fear the SCOTUS will strike

it down. I hope not, as if they do strike it down and millions upon millions of people get 10,000 USD or 20,000 USD (plus interest more than likely) dumped back on them (or, if they were zero balanced as they owed less than what they qualified for to be forgiven, they now are in debt once again thanks to the overturning), the results will be potentially cataclysmic for 2024. No amount of 'oh well, we tried, but just accept the 'L' and vote Blue no matter who' posturing is likely going to smooth it out with millions of those who will have been re-burdened.

I think we need to NOT forgive the debts (IF standing is granted) until we are sure the action will be allowed. People will get less upset if there is no 'surprise, you are now BACK in debt or are in further debt again' message from their lenders. Also, they likely will get less upset with us Dems IF it is the RW courts and the predator banksters fucking them over.

Biden then (if an injunction is also granted, freezing the action, along with the granting of standing) needs to attack attack attack the RW and all other entities trying to stop the forgiveness. Paint them all as financial debt slavery pushers. Doubly so if the entire thing is overturned.

[brush]

7. The debt forgiveness is based on encoded law. If repugs take it...

all the way to SCOTUS many months from now, repubs will be blamed, with proper Dem messaging. We are in power right now and can't let what repubs might do intimidate us. If we take that attitude we'll never accomplish anything by shying away because of what repubs might do.

We have to use the power when we have it.

[PortTack]

18. Absolutely!

[Celerity]

19. When is the soonest we will know if standing will be granted to the banks?

[lostnfound]

23. What are banks losing?? Future interest that they weren't guaranteed anyway?

Processing fees for services not rendered?
🤷‍♂️

[kelly1mm]

25. The monthly processing fees. May be bogus but is probably enough to give them standing. nt

[lostnfound]

27. Slate article addressed this and doubted that they'd have sufficient standing

“One last thing: It’s an open question whether anyone can sue against Biden’s program in the first place. In a persuasive and prescient analysis published this year in the Virginia Law Review, Jack V. Hoover argued that no one has standing to file suit against sweeping loan cancellation. To prove standing, a party would have to demonstrate concrete harm to them, and show how blocking cancellation would remedy that harm. Republicans complain that Biden’s program hurts taxpayers, but under Supreme Court precedent, taxpayers don’t have standing to sue. Former borrowers aren’t directly injured, nor can they show that forcing everybody else to pay off their loans would somehow benefit them. Congress is not allowed to sue just because it disagrees with a president’s interpretation of a statute. State governments aren’t injured, since forgiving federal loans imposes no burden on their finances or sovereignty.
…
Loan servicers, who are federal contractors, have the best case for standing because they profit from processing repayment and will therefore lose money under Biden’s plan. As Hoover noted, courts have generally refused to let contractors sue against federal regulations that hurt their bottom line. Contractors’ duty, after all, is to administer federal programs, and it’s debatable whether a new rule falls within their “zone of interest” solely because it hurts their profits. Moreover, the government spent more than $655 billion on federal contracts in fiscal year 2020 alone. If they could all sue “to protect their fiefdoms from regulatory change,” in Hoover’s words, they would guarantee “ossification” of the entire government.”
https://slate.com/news-and-politics/2022/08/biden-student-debt-relief-legal-supreme-court.html

[kelly1mm]

28. I am sure we will find out soon enough. Also, if the USSC wants to make a ruling badly enough

standing will not be the issue that precludes them from doing so ......

[brush]

29. How will it get to SCOTUS, and how long will it take?

[kelly1mm]

30. It will probably get appealed by the DOJ in the 11th Circuit (R leaning) or the DOJ may TRY to

have it heard in the DC Federal Circuit (one of DOJ's assertions was that all cases involving the records act in question had DC Federal Courts having sole jurisdiction). In either event the courts, either by 3 judge panel or en banc (the entire court) will hear the appeal and make a ruling. This process can take sometimes years but even fast tracked many months. Whomever loses from the Circuit Court can then appeal to the USSC. If at least 3 judges agree to hear the case it will get set for a hearing. This process also can take sometimes years but even fast tracked many months.

So I am thinking a realist timeline would be 15-24 months.