Did the Biden administration just send an important signal about the cancellation of the student loan?

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The Biden administration may have just given supporters of a large student loan forgiveness reason to hope the president will take action on student debt.

The US Department of Education announced this week that it will hire Toby Merrill as deputy legal director. Merrill previously founded and led the Project on Predatory Student Lending, a legal services organization that represents low-income borrowers who have been harmed by the predatory practices of for-profit schools. The project has been embroiled in a long-standing dispute involving the Borrowers Against Repayment program, which can grant student loan waivers to borrowers who have been defrauded by their schools.

Most notably, however, Merrill helped draft a Analysis arguing that the president has the power to write off student loan debt through executive action. “Congress has granted the secretary more specific and unrestricted power to create and write off or modify debts owed under federal student loan programs in the Higher Education Act (HEA) itself,” wrote Merrill in the note, along with two other lawyers. “This provision empowers the Secretary to execute the comprehensive debt cancellation plan.” [that Senator Elizabeth Warren] offers. Warren had presented a proposal during his 2020 presidential campaign to write off student loan debt on a large scale.

The legal analysis has highlighted a key provision of the HEA that gives the president, through the Secretary of Education, broad power to “compromise, waive or release” a borrower’s obligation on debt. federal student loans. Other student loan borrower advocacy organizations and members of Congress have cited this analysis to support their argument that President Biden should write off student loan debt using executive action.

Of course, not everyone agrees with the analysis. Lawyers acting under former Education Secretary Betsy DeVos argued that Congress did not intend to use these provisions of the HEA for the massive cancellation of student loans. “We believe that any action by the executive on a general or mass basis, whether under [the HEA or other federal statutes], mistakenly transforms the carefully established HEA settlement authority into a general administrative dispensing power, ”the lawyers wrote.

Calling in a student loan legal expert who argued for a blanket student loan cancellation does not conclusively mean that the Biden administration will adopt a blanket student loan forgiveness. Biden himself has expressed deep skepticism about the authority required to cancel student debt. He also expressed concerns that blanket student loan cancellation could unfairly benefit wealthier Americans or elite college graduates – concerns that critics say are unfounded and not rooted in facts or data.

Nonetheless, in April, the president asked his administration to conduct a formal legal review of authorizations that could serve as the basis for canceling student loan debt using executive power. There is no indication yet that this legal review has officially been completed or that firm conclusions have been drawn, making the administration’s recent hiring potentially significant.

“The Joe Biden administration brings in allies to the #cancelstudentdebt movement. This is huge! ”Said Student Debt Crisis, an advocacy organization for student loan borrowers and supporters of massive student loan cancellation, in a statement. Tweeter Tuesday.

Merrill’s appointment follows another major hiring decision from the Department of Education. Richard Cordray was patted in May to manage the federal student aid system. Cordray is the former director of the Consumer Financial Protection Bureau, a chief law enforcement agency protecting consumers from the harmful practices of financial institutions and loan officers. Part of Cordray’s job at the Department of Education will be to oversee the federal student loan services, which have been accused of widespread mismanagement of major federal student loan programs. Observers have speculated that this could signal an impending crackdown on problematic student loan servicing practices.

Further reading

Elizabeth Warren in Biden: Extending Student Loan Break Until 2022 or Later

Will Biden cancel student loan debt? We may know soon

Here’s why Biden can really extend the student loan payment break

Biden Student Loan Forgiveness Review: Should You Take Action Now To Write Off Student Debt Later?

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