May the Executive Branch Forgive Student Loan Debt Without Further Congressional Action?

Abstract

On April 1, 2021, the Biden administration announced that Secretary of Education Michael Cardona will consider whether the President has legal authority to forgive up to $50,000 per debtor in student loan debt without further Congressional action. This paper interrogates the leading arguments for and against the Biden administration’s capacity to forgive this student loan debt strictly using administrative action. This article first surveys the history of federal student loan forgiveness programs in the United States. It then considers whether statutes on the books—in particular, the Higher Education Act of 1965 and the Federal Claims Collection Act of 1966—grant the executive branch the authority to effect widespread student loan forgiveness. It considers how the Department of Education might use administrative action to forgive loans and assesses the pros and cons of the Department of Education’s proceeding without notice and comment rulemaking. Finally, this article evaluates the Biden administration’s prospects in court, including whether any parties would have standing to challenge administrative student loan forgiveness and which forms of administrative action are most likely to survive judicial review.

https://digitalcommons.pepperdine.edu/naalj/vol42/iss2/3/

An earlier draft of this paper previously appeared as Briefing Paper No. 74 of the Harvard Briefing Papers on Federal Budget Policy: https://scholar.harvard.edu/files/briefingpapers/files/74_-_mark_-_executive_student_loan_forgiveness.pdf

Keywords: Student Loans, Debt Forgiveness, Federal Budget Policy, Administrative Law, Appropriations Clause, Department of Education

JEL Classification: D1, H3, H31, H52, K32, I22, I24, I28