Biden Beats a Dead Horse

If at first you don’t succeed, try, try again. That seems to be President Biden’s philosophy when it comes to student loan forgiveness.

The president this week announced a new debt forgiveness program for student loan borrowers that will replace his earlier attempt. In a pair of cases last year, the Supreme Court struck down the Biden Administration’s loan forgiveness programs on the grounds that statutes that allow bureaucratic modifications do not necessarily allow complete overhauls and that Congress must explicitly authorize the Executive Branch if it is to make “decisions of vast economic and political significance.”

Now Biden is back with a new plan fresh off the drawing board. As the Washington Post explains, the first attempt was based on the HEROES Act of 2003 and attempted to argue that the Coronavirus pandemic constituted a national emergency that could trigger the Department of Education’s ability to “alleviate the hardship” of federal student loan borrowers. The new plan is based on the Higher Education Act of 1965, which Chief Justice John Roberts wrote in Biden v. Nebraska could be used to cancel debt in “certain limited circumstances.”

Contrary to some Biden critics who say that the president is ignoring the Supreme Court’s previous decisions, the Administration is creating a more limited plan that attempts to fulfill the president’s campaign promise while working within the framework established by the Supreme Court. Whether the plan will pass muster remains to be seen.

The new plan, which has not been finalized, would not apply broadly but would instead be focused on five categories of borrowers. Again referring to the Post’s coverage of the plan, those categories would include:

• Eliminate $20,000 in interest for borrowers who owe more than they borrowed due to accrued interest
• Eliminate all interest for borrowers who earn less than $120,000 ($240,000 for couples) and are on a repayment plan
• Automatic loan cancellation for borrowers who are eligible for existing cancellation plans
• Automatically cancel loans for people who have been repaying undergraduate loans for 20 years or graduate loans for 25 years
• Loan cancellation for borrowers who attended career training programs that led to high debt or low earnings

Does this plan meet statutory muster? Chief Justice Roberts explained what the Higher Education Act permits in the opening paragraph of Biden v. Nebraska :

The Act authorizes the Secretary of Education to cancel or reduce loans in certain limited circumstances. The Secretary may cancel a set amount of loans held by some public servants. He may also forgive the loans of borrowers who have died or become “permanently and totally disabled”; borrowers who are bankrupt; and borrowers whose schools falsely certify them, close down, or fail to pay lenders.

On the surface at least, it looks as though the Biden plan is an attempt to follow the chief justice’s roadmap.

It will be quite some time before we know what the Supreme Court thinks of the new program. The final rule will not be drafted for several months and it is unlikely that anyone will be able to mount a legal challenge before then. The plan will also be subject to federal rulemaking and review, a long process. Even when the plan goes into effect, plaintiffs will have to show standing and the case will have to work its way through the legal system. There is almost no chance that the Court will rule on the plan before the election, but the plan-in-process will enable Biden to say that he is fulfilling his campaign promise.

I would not be surprised if the Court upholds at least part of the new Biden plan, but at the same time, I’m a bit skeptical that the Court will smile upon such a broad (though narrower than the original) program. The conservative justices may well fall back on the doctrine that Congress does not “hide elephants in mouseholes.”

While there is an argument for at least some relief of student debt, especially if it is means-tested, it isn’t the role of the president to unilaterally cancel the debt for millions of borrowers. A program with an economic impact this large should be debated and discussed by the legislature. In other words, Congress should do its job.

I’m also going to point out that Republicans who are hardliners on student debt forgiveness are at least somewhat hypocritical on the issue. The Trump Administration issued its own student loan forgiveness for disabled veterans, a program that few would oppose, and shoveled billions out the door to favored groups such as farmers. Neither side is above using federal largesse to buy/reward the votes of their constituencies.

In a perfect world, Biden would submit his request to Congress and build a coalition to pass the legislation. This would require compromise, however, and “compromise” is a dirty word these days in addition to the attitude of Republicans that anything that might help Biden is DOA. (An attitude that many Democrats share under Republican presidents.) Congress is broken, and congressional ineffectiveness breeds executive overreach.

Having said that, while I oppose Biden’s executive actions on student debt, I don’t believe that it is on the same level as President Trump’s executive abuses. There are key differences that make Trump’s actions a much bigger problem.

For starters, Biden is listening to the Supreme Court and abiding by its decision. When the Court killed his earlier plan, he created a new one based on the Court’s decision. This is how the system is supposed to work (notwithstanding the whole argument that Congress should be doing this instead of the president).

On the other hand, Trump rejected the decisions of numerous courts. When Trump claimed that the election was stolen from him, he got 62 days in court and lost every case that was decided on merits. Trump rejected these legal losses, instructed the vice president to overturn the results of the election based on a very flawed reading of the Electoral Count Act (talk about elephants in mouseholes!) that is probably going to result in disbarment for John Eastman, and ultimately sent his supporters to attack Congress to enforce his will. (I know some readers dispute the fact that Trump incited the Capitol insurrection, but he absolutely did.)

Joe Biden is not claiming to have unlimited constitutional authority to do “ whatever I want.” He is not claiming personal “total immunity” to break the law. He is attempting to advance his agenda through constitutional and statutory means.

Whatever else you can say about Joe Biden, if and when the Supreme Court strikes down Student Loan Forgiveness Part II (“Electric Boogaloo”), I am certain he will not send his supporters to ransack the Capitol or Supreme Court.

The difference between the two is key. Biden’s policy may be bad, but he is pursuing bad policy in a peaceful, traditional, and legal way. Biden’s bad policy won’t break the Constitution, but Trump’s assault elections might.

It’s the distinction between a broken leg and a heart attack. Both are bad, both are problems, but one is much more serious than the other.

For my part, I’d say they are both wrong. Presidents are not kings. They should be subject to the laws of the land and not able to rule by decree. For that matter, the federal government shouldn’t even be in the student loan business.

Both the president in particular and the government in general should return to their limited, constitutional roles.