Biden does NOT have the legal authority to cancel student loans for large number of Americans and would be on shaky ground if he used executive action, Obama’s top education lawyer says
- An ex-lawyer for President Barack Obama’s Education Department warned President Joe Biden would be on shaky legal ground by cancelling student debt
- The Wall Street Journal reported on a ‘strictly confidential’ memo penned by Obama Education Department lawyer Charlie Rose
- He warned that ‘the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation’
- Rose wrote the memo last May for a private client after White House Chief of Staff Ron Klain said the administration was pursuing a legal review
- Press secretary Jen Psaki said Biden would take some action on student loans before the replayment moratorium lifts on August 31
- Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren have argued Biden can do away with $50,000 per borrower using executive action
- Rose’s memo says that could open the administration up to suits from student loan service providers and investors that owned securities backed by loans
- He suggests that for better legal cover, the administration can provide relief through a number of rules changes, which would wipe away a lot of debt
The top lawyer in former President Barack Obama’s Department of Education warned in a ‘strictly confidential’ memo that President Joe Biden would be on shaky legal ground if he tried to cancel student debt using executive action.
On Wednesday night, The Wall Street Journal reported on the existence of the memo, penned by former Education Department lawyer Charlie Rose for his law firm Hogan Marren Babbo & Rose, Ltd. and dated May 7, 2021.
‘If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation,’ Rose wrote.
The top lawyer in former President Barack Obama ‘s Department of Education warned in a ‘strictly confidential’ memo that President Joe Biden would be on shaky legal ground if he tried to cancel student debt using executive action
The Wall Street Journal revealed that President Barack Obama’s top Education Department lawyer Charlie Rose (pictured) penned a memo suggesting the Biden administration would be on shaky legal ground if the president broadly wiped out student debt through executive action
He suggested that loan-servicing companies and investors that owned securities backed by federal student loans might be able to sue the administration if Biden broadly wiped out student debt.
The memo doesn’t identify the client it was prepared for, though it contains recommendations for the Biden administration.
Rose told The Journal that the memo was prepared for a private client.
He also told the paper that he never intended it to be made public.
White House press secretary Jen Psaki has indicated that Biden plans to take some action on student loans before the replayment moratorium lifts on August 31.
Senate Majority Leader Chuck Schumer and some prominent progressives, including Sen. Elizabeth Warren, have encouraged Biden to kill off $50,000 in debt per borrower using the stroke of his pen.
During the 2020 campaign, Biden floated $10,000 per borrower – and tied it to incomes under $125,000 a year, an income ceiling that Psaki said this week was still on the table.
Since becoming president, Psaki has also encouraged Congress to send Biden a bill writing off $10,000 in debt for every borrower.
On Capitol Hill, however, there aren’t the votes to get a student debt relief bill passed through both chambers.
White House Chief of Staff Ron Klain said last April that the White House had requested a legal review into what Biden could do via executive action.
Rose’s memo cites that review in its introduction, however it’s unclear whether the memo was circulated at the White House.
The White House declined to comment to The Journal on the matter.
Activists encourage President Joe Biden to cancel student debt at a demonstration near the White House in late April
A spokesperson for the Department of Education didn’t respond directly to the paper’s inquiry on Rose’s legal argument, instead saying that the Biden administration’s ‘overall goal is long-lasting change that reduces indebtedness and makes college more affordable, including through rulemaking.’
The spokesperson added that the ‘Department’s review of broad based debt cancellation remains ongoing.’
Whether broad debt cancellation would be allowed depends on how courts interpret the Education Secretary’s powers under the 1965 Higher Education Act, which gives the secretary ‘consent’ to modify loans and the power to ‘compromise, waive or release’ unspecified amounts of student debt.
Where Rose’s memo preaches caution is that he says while Congress has created debt-forgiveness programs for targeted groups of borrowers ‘it is fair to discern Congress has inferred that the [Education] Department should not decide the question of mass forgiveness of performing loans.’
Rose argues that for better legal cover, the administration can provide relief through a number of rules changes that would lead to forgiveness for large numbers of borrowers.
That avenue would take longer, Rose wrote, but would be less susceptible to lawsuits.