Relying on Section 432(a) of the Higher Education Act of 1965, as some propose, has many of the same flaws as the Administration’s emergency powers theory.
In my last post about President Biden’s plan to cancel hundreds of billions of dollars in student loan debt, I criticized the administration’s claims that the policy is authorized by an emergency power provision of the 2003 HEROES Act. But there is an alternative potential legal justification for the policy: Section 432(a) of the Higher Education Act of 1965, (now codified as 20 U.S.C. Section 1082(a)(6), which authorizes the Secretary of Education to „enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption“ related to loans authorized by the Federal Direct Loan Program.
Fordham law Professor Jed Shugerman, who is highly critical of the administration’s HEROES Act theory, argues that the Higher Education Act (HEA) provides a much stronger rationale for Biden’s plan. Earlier, Sen. Elizabeth Warren and others argued that Section 432(a) could even justify a much larger debt cancellation program. Last year, the administration viewed this theory with skepticism. But should Biden’s plan be challenged in court, they could potentially still resort to it.
In some ways, the HEA argument is indeed superior to the HEROES Act theory. Taken in in isolation from the rest of the Act, Section 432(a) does appear to grant the executive the power to cancel as much student loan debt as it wants. That can be extrapolated from the power to „waive…or release any right, title, claim, lien, or demand“ (emphasis added). Moreover, unlike the HEROES Act theory, the HEA justification isn’t confined to emergency situations or to borrowers who can plausibly claim that an emergency or disaster has made it more difficult for them to pay their debts. If the argument is correct, the administration can cancel any amount of federal student loan debt, at any time, for virtually any reason.
But a closer look suggests that the HEA theory is flawed for may of the same reasons as the HEROES Act rationale. Indeed, its breath-taking scope contributes to its undoing.
The HEA rationale was examined in some detail in a January 2021 memorandum written by then-Education Department Deputy General Counsel Reed Rubinstein, for outgoing Trump Administration Education Secretary Betsy DeVos (Secretary DeVos actually resigned in protest of Trump’s role in the January 6, 2021 attack on the Capitol a few days before the memo was officially submitted to her; but I don’t think this changes its status).
