Campus Reform | Sec. Cardona declines to say if power to nationalize student debt lies with White House or Congress

Sec. Cardona declines to say if power to nationalize student debt lies with White House or Congress

Progressive lawmakers, led by Rep. Ilhan Omar, wrote a letter to Cardona asking him to release the memo by October 22.

The memo will determine which branch of government Democrats will use in an attempt to nationalize at least some part of student debt. Progressive lawmakers say the Biden administration can enact mass loan forgiveness unilaterally, without Congress.

Education Secretary Miguel Cardona has declined to release a long-awaited memo on whether the Biden administration has the authority to cancel student debt. 

A group of 19 progressive lawmakers, led by Rep. Ilhan Omar, sent a letter to Cardona on Oct 8 asking him to release the memo by Oct. 22. The letter stated, “The time has come to release the memo and cancel student debt. Decades ago, Congress voted to authorize the executive branch to cancel federal student loans. Federal student debt can be canceled with the ‘flick of your pen.’”

The memo had been anticipated long before this point: On April 1, White House Chief of Staff Ron Klain said in an interview with Politico that Biden had directed Cardona to prepare a memo on what authority the President has to cancel student debt. Klain said, “Hopefully we’ll see that in the next few weeks.” But months later, no such memo has been made public.  

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According to the letter, Omar and the other signatories believe that section 432(a) of the Higher Education Act gives the Executive Branch the authority to cancel student debt. However, the Trump administration looked into this same question before leaving office and authored a memo, posted online by Politico, (note: the memo has been archived from the government website) saying the Education Secretary has no such authority, based both on existing legislation and legal precedent. The memo holds that the authority used by the President to set student loan interest rates to zero and suspend monthly payments due to the COVID-19 pandemic only operates in temporary and narrow circumstances, not for blanket loan cancellation.  

The memo states that the executive branch lacks the power to enact mass loan forgiveness because the authority to draw funds from the Treasury belongs to Congress and because the emergency powers granted to the executive branch by the HEROES Act do not include the power to cancel student debt en masse. Additionally, the memo states that Congress could enact blanket forgiveness if it so chooses. The document implies that Congress is aware of this authority because it has used it before to forgive loans in specific situations: “Congress has explicitly authorized cancellation, compromise, discharge, or forgiveness, and/or material modifications to repayment amounts or terms only in very limited circumstances,” it says.

Whether the authority lies with the administration or with Congress has been a topic of much debate in Washington. Congressional Democrats are placing the onus to cancel the debt on the Biden administration. Speaking virtually to an event held by the University of Southern California last week, Senate Majority Leader Chuck Schumer said, “Last year, I teamed up with Senator Warren, Representative Pressley, and so many others to call on President Biden to cancel up to $50,000 in student loans for each student. With the flick of a pen, President Biden could cancel $50,000 in student loan debt and provide millions up on millions of student loan borrowers a new lease on life.” In February, Schumer joined with Sen. Warren, Rep. Pressley, Rep. Omar, and other progressives to introduce a resolution calling on Biden to cancel up to $50,000 in student debt per borrower. In recent days, Warren and Pressley have each taken to Twitter to reiterate their plea for Biden to unilaterally cancel debt.

[RELATED: VIDEO: Young Americans say canceling student loan debt is 'dangerous']

The White House, however, has said it is Congress – not the administration – who must act, and that the maximum amount of student loan forgiveness should be $10,000 per borrower. At a February press briefing, White House Press Secretary Jen Psaki said, “The President has and continues to support canceling $10,000 of federal student loan debt per person, as a response to the COVID crisis.  He’s calling on Congress to draft the proposal.  And if it is — if it is passed and sent to his desk, he will look forward to signing it.”

Rep. Omar’s office did not respond to a request for comment. This piece will be updated in the event of a response.

Follow the author of this article on Twitter: @AngelaLMorabito