Biden's student-loan forgiveness might not be doomed if the Supreme Court strikes it down — he could take another legal path

US President Joe Biden.
US President Joe Biden.Kevin Dietsch/Getty Images
  • Biden's student-debt relief remains blocked in court following conservative-backed lawsuits.

  • A primary argument against the relief is that it violates the authority under the HEROES Act.

  • Some advocates and lawmakers argue the Higher Education Act can be used to cancel student debt.

Gloria Weiss, 64, is "furious" that student-loan forgiveness still hasn't reached her $31,000 balance.

Since taking out Parent PLUS loans for her son in 2010 — a type of student loan parents can take out under their own names to cover up to the full cost of attendance for their child's education — Weiss said she has been on a standard-repayment plan with payments reaching over $900 a month before the pandemic hit.

But after President Joe Biden announced $20,000 in student-debt relief for Pell Grant recipients, and $10,000 in relief for other federal borrowers making under $125,000 a year, Weiss looked forward to that loan forgiveness and the lower monthly payments it would bring.

That excitement only lasted so long — a number of conservative-backed lawsuits seeking to block the relief have gained traction over the past months, and, in mid-November, two federal courts ruled the relief cannot move forward, keeping it from reaching millions of borrowers.

The uncertainty of the relief is weighing on Weiss — after her husband lost his job, she took on part-time work on top of her regular job as a teacher, and she had to begin digging into her retirement funds to afford the monthly student-loan payments.

"I am not secure. We are just barely making it," Weiss said. "I don't want to dig into my retirement funds. And I'm very stressed, so anxious, on this rollercoaster of emotions."

While student-debt relief isn't completely off the table — the Supreme Court ruled on Thursday that it will hear arguments on the lawsuit blocking relief in February — there still could be another way Biden can get loan forgiveness to millions of Americans.

A primary thread among the lawsuits is that Biden's overstepping his authority by enacting one-time debt relief using the HEROES Act of 2003, which gives the Education Secretary the ability to waive or modify student-loan balances in connection with a national emergency, like the COVID-19 pandemic. Biden's administration, along with some legal experts and advocates, have maintained that the authority clearly exists under that law. But given it's the root of many of the challenges to the loan forgiveness, some have argued Biden can save the relief by turning to a different authority: the Higher Education Act of 1965.

"I believe it probably would have been better for him to use the Higher Education Act of 1965," Weiss said. "And that's what I want him to do today. I want him to use that today. And I want him to do it immediately without delay. Because the wait opens the door for more lawsuits, which will come."

Why courts are debating the HEROES Act

Biden's administration has said on numerous occasions that student-loan borrowers are continuing to recover from the pandemic, and using the HEROES Act to provide one-time relief falls within the realm of the law. Both former President Donald Trump and Biden have used the same authority to pause student-loan payments — a pause Biden just extended for his sixth time through June 30, 2023 at the latest.

Former Rep. George Miller — an architect of the HEROES Act — even wrote in an amicus-curiae brief to the Supreme Court that the debt relief falls "exactly" under the Education Secretary's authority.

"As our brief shows, Congress used broad language in the text of the HEROES Act to make clear that the Education Secretary has extensive authority to respond to national emergencies, and the history of the law confirms that it authorizes comprehensive actions when the circumstances call for them," Miller's filing said. "While the states challenging the debt-relief plan may not like it as a matter of policy, their contention that the loan forgiveness plan exceeds the Administration's authority is completely without merit."

But many Republicans don't see it that way. The six Republican-led states who filed the lawsuit blocking debt relief in the 8th Circuit wrote in a response to the Biden administration's request for the Supreme Court to revive the debt relief that the HEROES Act "text and context demonstrate that its purpose is to keep certain borrowers from falling into a worse position financially in relation to their student loans.

"Yet the Secretary uses it here to place tens of millions of borrowers in a better position by cancelling their loans en masse," the filing continued. "The Act does not allow the Secretary to effectively transform federal student loans into grants. It is telling that the Secretary has never before used the Act in this way."

Along with the 8th Circuit ruling, a federal judge in Texas ruled Biden's student-loan forgiveness illegal partly because the "pandemic was declared a national emergency almost three years ago and declared weeks before the Program by the President as 'over.' Thus, it is unclear if COVID-19 is still a 'national emergency' under the Act."

Anthony Fauci, the nation's top infectious-disease expert, told NBC on Sunday that the US is "certainly" still in a pandemic.

The Higher Education Act as an alternative

Some Democratic lawmakers and experts argue that the authority to cancel student debt has always existed under the Higher Education Act. Under the Act's compromise-and-settlement authority, it states that the Education Department can "enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand" related to federal student debt.

In February 2021, Senate Majority Leader Chuck Schumer, Massachusetts Sen. Elizabeth Warren, and Massachusetts Rep. Ayanna Pressley led a group of Democratic colleagues in introducing a resolution outlining a plan for Biden to cancel student debt using the Higher Education Act, which does not require a connection to a national emergency.

"President Biden has the legal authority to cancel billions in student debt with the stroke of a pen and he must meet the moment by using that authority, which would not only set us on a path to an equitable recovery, but would also help reduce the racial-wealth gap," Pressley said at the time.

Legal experts have also voiced support for the Higher Education Act. In September 2020, the Legal Services Center of Harvard Law School wrote a memo for Warren outlining why the Act gives the Education Secretary authority to cancel student debt broadly. The memo said that the "Secretary has the authority to modify a loan to zero, and exercises this authority even in the absence of any implementing regulations."

The Education Department did not immediately respond to Insider's request for comment on whether it is considering pursuing alternative routes to debt relief, including via the Higher Education Act.

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