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Supreme Court agrees to hear second challenge to President Joe Biden’s plan to “cancel” millions of borrowers’ student loan debt, setting the stage for a bitter legal battle in early 2023 I was.
In August, the White House announced that it would allow $10,000 for most borrowers and up to $20,000 for Pell Grant recipients. Rather than persuade Congress to pass the bill, Mr. Biden used an executive order to create a debt forgiveness plan.
The Supreme Court should overturn Biden’s radical attempt to cancel student loan debt, but that’s not the only unconstitutional student loan policy the country’s Supreme Court should consider. Biden’s latest “freeze” on student loan payments is likely illegal and should be removed as well.
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On Nov. 22, the Biden administration again extended the moratorium on all federal student loan payments. With this extension, more than 40 million Americans will not be required to make student loan payments until September 2023 at the latest, regardless of how much the borrower has earned or built.
President Joe Biden continues to try to extend student loan nonpayment. It’s bad policy and illegal.
(AP Photo/Susan Walsh)
The moratorium on federal student loan payments began in March 2020. That’s when President Donald Trump and the Democratic-led Congress allowed borrowers to temporarily avoid payments under his CARES Act. The payment freeze was designed to help borrowers through the turbulent economic crisis caused by the COVID-19 pandemic and the state and federal government’s decision to shut down much of the U.S. economy.
The suspension of payments was supposed to last only until September 30, 2020, but has since been extended eight times, six of them by the Biden administration.
Freezing federal student loan payments is terrible public policy. Not only did he cost taxpayers $155 billion, but millions of borrowers became borrowers. Many of them are in their 20s and 30s and have the mistaken belief that they never lost their jobs during the pandemic and don’t need to pay off their debts. Incredibly, it has been nearly three years since the borrower was asked to pay.
Perhaps most outrageous is that under the student loan payment freeze provision, nonpayments count as “payments” against various student loan forgiveness plans. Most notably, while working for a government agency or non-profit organization, after the borrower has made his 120-month payment, regardless of the amount of the debt, can receive full forgiveness of student debt. It is a Public Service Loan Forgiveness (PSLF) program.
Even during the COVID-19 pandemic, it is absurd to claim that all federal student loan borrowers “suffered direct financial hardship as a direct result” of the pandemic.
Suspension of payments is highly unfair to Americans who have already paid off their student loans, graduated from college, or never attended college. It has become something.
When the payment freeze under the CARES Act was supposed to expire in September 2020, the Trump administration extended the moratorium without new legislation passing Congress. Instead, the Department of Education claimed it had powers to continue the payment freeze under the 2003 HEROES Act. This is a claim adopted by the Biden administration.
The HEROES Act is not meant to justify a drastic pause in student loan payments like the Trump and Biden administrations have. The members of Congress who wrote it were primarily concerned with helping military personnel and other public servants during the war.
However, the vague language of the law indicates that the Secretary of Education “waived” any statutory or regulatory provision applicable to student loans “suffering direct financial hardship as a direct result of war or other military operations or the State.” or change. An emergency decided by the Secretary.
A “national emergency” under the law is one formally declared by the president, such as the ongoing coronavirus national emergency.
Even during the COVID-19 pandemic, it is absurd to claim that all federal student loan borrowers “suffered direct financial hardship as a direct result” of the pandemic. I didn’t lose my job and was able to save money by working from home. But what was difficult to make such a claim in 2020 and early 2021 has become virtually impossible today.
There are simply no economic indicators to suggest that all, most, or a significant minority of borrowers are suffering as a “direct result” of the coronavirus pandemic. Wages have risen since the start of the pandemic, and most lockdowns in the US economy have ended for more than a year. The unemployment rate is now at 3.7%, about the same as in the months before the 2020 pandemic, and total full-time employment is higher than before the pandemic.
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Equally important, millions of people taking out federal student loans are enrolled in income-based or income-driven repayment plans that tie monthly payments to income. These plans allow enrollees to “pay” for as little as $0 a month if they lose their jobs, thus “suffering direct financial hardship” justifying freezing student loan payments. It is virtually impossible to claim The “difficulties” that arise are already covered by the income-based payment model.
The Supreme Court has agreed to hear another challenge to President Joe Biden’s plan to “cancel” millions of borrowers’ student loan debt.
(Emily Erkonin/Bloomberg via Getty Images)
The HEROES Act says absolutely nothing about public service loan forgiveness, so Biden’s practice of counting monthly unpaid payments as “payments” under the public service loan forgiveness program could also be illegal. did not become law until 2007, four years after Congress and President George W. Bush passed the HEROES Act.
The CARES Act included such a provision, but the Congressional Research Service notes that it expired in 2020. After an exhaustive search, the Biden administration called the nonpayment a “payment for the purpose of the debt forgiveness program.”
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For all parts of Biden’s suspension of payments to be legal, the administration would have to succeed in claiming, for example, that civil servants earning six-figure salaries did not lose their jobs during the pandemic and have since moved. We are three years closer to full student loan forgiveness under the PSLF, but today we are enduring “direct financial hardships” related to the coronavirus pandemic. Then I have a nice little bridge in Brooklyn. I will be happy to sell it to you.
A seemingly never-ending “pause” of payments isn’t just bad policy. It’s likely illegal, just buying votes.
Click here to read more from Justin Haskins
