The White House recently released a memo about canceling debt for federal student loan borrowers, but the text was heavily redacted. This seven-page memo, dated April 5, 2021, was addressed to the U.S. Secretary of Education in consideration of potential student loan forgiveness by the Biden Administration. This memorandum, although heavily redacted, gives some insight into whether the administration has the authority to issue widespread student loan forgiveness.
The memorandum entitled: “The Secretary’s Legal Authority for Broad-based Debt Cancellation” covered several topics, including:
- Whether the President has the authority to issue an executive order cancelling student loan debt,
- Recommendations on whether to forgive student loan debt, including how this can be done and the timing recommended,
- Arguments for and against student loan debt cancellation,
- How much debt should be cancelled,
- Who could qualify for student loan cancellation, and
- Any alternatives to student loan debt cancellation.
Congress has asked the Biden administration to release the memorandum for months with no success. Debt Collective was able to obtain the redacted memo through a Freedom of Information Act request. The redacted memo shows that it was dated in April 2021, but it is believed that an initial memo was issued in February 2021.
Debt Collective and other student loan advocates argue that the White House was playing politics by delaying issuing the memo since they have had it for months. Many believe the delay in issuing the memo could be because the administration believes they do not have the authority to cancel student loan debt without authorization from Congress. The White House and Education Department say they are still exploring their options, however, and that no final decision has been made.
At this point, it is up to the president to decide whether he should follow the recommendations within the memorandum or whether he should reject the recommendations entirely or in part. The problem is any decision made by the administration will likely face legal challenges. Ultimately, it will be the judicial branch that makes the final decision regarding the president’s legal authority to act without Congress in forgiving student loan debt. Because of the possibility that whatever executive order is issued, the judicial branch will hear challenges on it, the Biden administration has focused on targeted student loan cancellation instead of mass student loan cancellation. An example of this are recent executive orders issued by President Biden focusing on student loan borrowers who were defrauded by unfair loan practices or for-profit educational institutions.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
