• February 1, 2023

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The Biden administration may have just dropped a significant clue on whether it may enact broad student loan forgiveness. While no formal decisions have been made, a new filing in federal court shows that the administration endorses, at least to some extent, a legal argument that existing federal law provides a basis for student loan cancellation through executive action.

Here’s the latest.

Student Loan Forgiveness Under the Higher Education Act

Since Biden took office last year, a broad coalition of student loan advocacy organizations and leading congressional Democrats have been pushing President Biden to cancel student loan debt on a mass scale using executive action.

During his 2020 presidential campaign, Biden pledged that he would support $10,000 in student loan forgiveness for every borrower. But since taking office, he has been reluctant to proceed without legislation passed by Congress, and expressed concern that he may not have legal authority to cancel student loan debt unilaterally through executive action. Biden has appeared more open to the idea in recent months, but he has not made any decisions.

Advocacy organizations, Democratic leaders in Congress, and several leading student loan legal experts have argued that the President does, in fact, have legal authority to cancel student debt through executive action. They point to the Higher Education Act (HEA) — a sprawling statute that governs much of federal student aid system — which has language that, they say, confers broad authority on the President, via the Secretary of Education, to “compromise, waive, or release any right, title, claim, lien, or demand” associated with federal student loans.

Borrower advocates have argued that this clause is sufficiently specific and sweeping to allow the President to act. In a widely circulated memo, attorneys with the Project on Predatory Student Lending at the Legal Services Center at Harvard Law School wrote that this clause confers “broad” authority to cancel federal student loans on a mass scale.

Biden had tasked attorneys at the Education and Justice Departments last year with drafting a legal analysis to determine whether the HEA or other statutes confers sufficient authority to allow a President to enact student loan forgiveness without Congress. The contents and conclusions of that analysis have not been made public.

In Court Filing, Biden Administration Cites HEA Compromise Authority to Support Student Loan Forgiveness Initiative

In a court filing this week, the Biden administration suggested that it agrees that the HEA in fact does confer broad authority to cancel student debt — at least to a certain extent.

The filing was in regards to Sweet v. DeVos — a class action lawsuit brought by student loan borrowers over stalled applications for Borrower Defense to Repayment. Borrower Defense to Repayment is a federal student loan forgiveness program for borrowers who were misled or defrauded by their school. Last month, attorneys for the Education Department and the class of student loan borrowers announced a proposed joint settlement agreement for the case that would cancel $6 billion in federal student loans for over 264,000 borrowers who attended certain schools.


In its filing this week, which the Department of Education submitted in opposition to a motion by several impacted schools to intervene, the Biden administration suggested that the $6 billion in student loan cancellation that the parties proposed under the settlement agreement would not actually be implemented via Borrower Defense to Repayment, but rather through the HEA’s compromise authority. The Education Department pointed to the Secretary of Education’s “considerable discretion under the HEA to compromise and settle claims” related to federal student loan programs.

“The Secretary’s ‘compromise and settlement authority’ includes the authority to compromise and release the student loan debts owed to him by federal student loans borrowers on terms determined by the Secretary,” wrote the Department in its filing. This language suggests that the Education Department’s position may align, at least to some extent, with the broad interpretation being pushed by congressional Democrats and student loan borrower advocacy groups.

The court has not yet ruled on the Department’s arguments.

Biden’s Next Move on Student Loan Forgiveness Remains Unclear

Still, the Biden administration has emphasized that no decisions have been made on broad student loan forgiveness. And while the administration’s interpretation of the HEA, as described in this week’s court filing, is promising for borrowers, it does not necessarily guarantee that the President will use executive action to broadly cancel student debt. The administration could argue, for instance, that this broad authority is intended to settle “claims” regarding federal student loans, as it suggests in its filing, rather than applying to broad, unilateral action impacting millions.

Still, the Department’s statement that the clause confers “considerable discretion” to compromise federal student loans “on terms determined by the Secretary” is potentially significant.

Officials have consistently said that Biden will make a decision on student loan forgiveness before the end of the student loan pause. That expiration date — August 31, 2022 — is approaching quickly.

Last week, a reporter asked Biden when he will make a final decision on student loan forgiveness.

“By the end of August,” he said.

Further Student Loan Reading

Biden Will Decide On Three Key Student Loan Relief Initiatives Within Weeks

Biden Administration Has Approved $26 Billion In Student Loan Forgiveness, But Borrowers Face Deepening Uncertainty

3 Key Student Loan Forgiveness Opportunities May End Soon — Here’s How To Apply

If You Went To These Schools, You May Qualify For Student Loan Forgiveness: Here’s What To Do


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