NCLA Tells Department of Education Its Newest Student Loan Debt Cancellation Plan Is Unlawful
17 Mayo 2024 - 4:56PM
Today, the New Civil Liberties Alliance submitted comments
urging the U.S. Department of Education to abandon its latest
proposed rule that would unconstitutionally cancel $147 billion of
federal student loan debt owed to the Treasury by an estimated 27.6
million borrowers. The plan even proposes to bestow about $19
billion of that on about 750,000 student loan debtors whose average
annual household income exceeds $300,000! Outrageously, that sum
means American taxpayers would give more than $25,000 apiece to
debtor households making over $300,000 per year. Congress has
repeatedly declined to erase such debt, and the Department of
Education lacks legal authority to do so unilaterally. NCLA calls
for an end to this latest Biden Administration attempt at
subverting the rule of law to erase student loan debt.
In June 2023, Supreme Court overturned the
Department of Education’s previous $430 billion plan to cancel
student loan debt via the HEROES Act, taking advice NCLA offered in
its amicus curiae brief against the program. The Department’s new
proposal, published in April after negotiated rulemaking, would
cancel specific loans held under the Federal Family Education Loan
program, the Direct Loan program, the Perkins Loan program, and the
Health Education Assistance Loan program. The Department claims a
section of the Higher Education Act of 1965 gives the Secretary of
Education unfettered power to cancel any federally-held student
loan debt. But the statute has never been invoked to broadly cancel
student loan debt owed to taxpayers before, cannot be read plainly
to that effect, and was not understood to authorize such action in
the past. The government’s inaccurate reading of the law would
render other, pre-existing loan forgiveness programs completely
superfluous.
The Supreme Court’s Major Questions doctrine,
barring federal agencies from resolving matters of “vast economic
and political significance” without explicit congressional
authorization, forbids the Department’s new debt cancellation
proposal. The plan would also violate the Appropriations and
Vesting Clauses in Article I of the Constitution, which reserves
all legislative authority and power of the purse for Congress. The
Department’s attempt to wield such unrestrained power adds to a
now-familiar pattern of executive agencies “discovering” new
meaning in decades-old statutory text to claim unheralded and
transformative authority to accomplish what Congress has
conspicuously declined to regulate. NCLA works tirelessly to stop
this pernicious trend from further degrading Americans’ civil
liberties.
NCLA released the following
statements:
“The Department’s proposal relies on a 1965
statute that allows the Secretary to ‘waive’ certain loans under
the Federal Family Education Loan program. But that program no
longer exists. And the vast majority of loans that the Department
seeks to cancel are made under the entirely different Direct Loan
program created in 1993. The Department’s proposal is akin to
trying to claim a home loan program allows someone to finance car
loans.”— Sheng Li, Litigation Counsel, NCLA
“If Congress wanted to transfer $25,000 in
student loan debt away from people earning over $300,000 per year
and onto the American taxpayer (who averages less than $60,000/year
after taxes), I suppose it could do so—and then face the wrath of
the American voter over the outrage. But the Department of
Education cannot reinterpret old law to give it this ill-begotten
power. The fact that Congress would never undertake such a dubious
debt-cancellation plan is further proof that the Department is
acting unlawfully.”— Mark Chenoweth, President, NCLA
For more information visit the comments
page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights
group founded by prominent legal scholar Philip Hamburger to
protect constitutional freedoms from violations by the
Administrative State. NCLA’s public-interest litigation and other
pro bono advocacy strive to tame the unlawful power of state and
federal agencies and to foster a new civil liberties movement that
will help restore Americans’ fundamental rights.
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Ruslan Moldovanov
New Civil Liberties Alliance
202-869-5237
ruslan.moldovanov@ncla.legal