The fate of student debt relief may rest with the courts
During the multiple-year debate over mass student-loan forgiveness, one of the major points of contention was whether the Secretary of Education had the legal authority to discharge student loans without congressional action.
“It leaves the Department open to potential litigation,” he said. “At the end of the day if there is litigation, it’s not the Department that gets harmed over the long term, it’s the borrowers, who don’t get the relief they now expect because of this announcement.” Advocates pushing for debt relief over the past several months had urged the White House and the Department of Education to use a different authority, known as settlement and compromise, to cancel student loans en masse.
“The goal is to make it out of the pandemic no worse off than you were before the pandemic,” Secretary of Education Miguel Cardona told NPR. “So this is targeted relief based off of [the] pandemic.” “Assuming that there is a proper plaintiff to bring the claim, this policy would be prime for challenge under the major questions doctrine,” Rubenstein said.
“If the substantive issue gets in front of this Supreme Court, we know that this Supreme Court is likely to try to find a way to strike it down,” he said. Once borrowers see their balances drop or disappear, that could make it more difficult for some entities to challenge the policy “from a PR perspective,” Bergeron said. It’s also unlikely that if an injunction came after borrowers received the relief, it’s unlikely the court would actually reimpose the debt, Bergeron and Herrine said.
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