What Biden Can’t Do on Student Debt – and What He Won’t Do

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      Occupy ended, but the debt-cancellation idea kept evolving. The amount of student debt in the country surpassed a trillion dollars, then a trillion and a half. The Occupy Student Debt Campaign tried to persuade a million student debtors to default, openly and collectively, on their loans. This failed, but this campaign eventually grew into one called Strike Debt, which later reëmerged as the Debt Collective. The activists kept organizing debtors, but they also started trying to convince politicians of the need for debt cancellation, and trying to identify legal mechanisms that could make it happen. “Our position was always that the government can and should cancel federal student debt,” Astra Taylor, one of the Debt Collective’s co-founders, who has also contributed to The New Yorker, told me. “But it wasn’t until 2015 that we started doing the government’s homework for them to lay out how it could be accomplished.”

      Most people assumed that any vast shift in student-loan policy, such as broad-based cancellation, would require new laws. President Barack Obama, citing a lack of “bold action” in Congress, ordered his Department of Education to make incremental reforms, consolidating some loans and reducing some interest rates—far less than what activists wanted, but in line with what most experts thought was possible via executive action. Then, in 2016, Robyn Smith and Deanne Loonin, lawyers at the National Consumer Law Center, wrote a memo pointing out an obscure provision of the Higher Education Act. The provision, which has been on the books since 1965, gives the Secretary of Education the authority to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand.” They proposed that the Department of Education, by far the largest student-loan collector in the country, already had the unilateral power to modify those loans as it saw fit. Smith and Loonin suggested that the department should use this power to cancel the debt incurred by a few thousand alumni of predatory for-profit colleges. But Luke Herrine, then a law student at N.Y.U. and another co-founder of the Debt Collective, saw no reason that the department couldn’t use its discretion in more sweeping ways. “As far as I can tell, nothing in current law prevents the Department from using its compromise authority to cancel broad swaths—or even all—of its student loan portfolio,” Herrine wrote in 2017. In other words, he argued, the President could order the Education Secretary to cancel any amount of student debt at any time, without waiting for any further action from Congress. This was more of a remote hypothetical than an imminent possibility, especially given that the President at the time was Donald Trump. “When I first put the idea out there, I didn’t expect it to go anywhere,” Herrine, who is now a Ph.D. student at Yale, told me recently. “At least not in the short term.”

      The idea started to gain some acceptance within legal academic circles. “There was a lot of scoffing at first,” Herrine said. “Now there are still experts who disagree with my interpretation, but it’s more along the lines of ‘This isn’t the way it traditionally works,’ not ‘Here’s a clear, knock-down reason why this can’t work.’ ” (Two Harvard law professors, for instance, recently called Herrine’s interpretation “a plausible textual reading” but cautioned that an executive debt-relief initiative “might be tied up in court for many years.”) In 2019, Julie Margetta Morgan, who was then a researcher at the Roosevelt Institute, a progressive think tank, asked Herrine to write a white paper called “An Administrative Path to Student Debt Cancellation.” Later that year, after Morgan joined Elizabeth Warren’s Presidential campaign as a policy adviser, Warren announced a new plan: as President, using executive authority, she would cancel more than a trillion dollars of student debt. (Morgan now works at the Department of Education.) Warren argued that her plan, although it looked expensive, would ultimately be a boon to the economy, promoting consumer spending and narrowing the racial wealth gap. Representative Ilhan Omar, an ally of the Debt Collective, persuaded Bernie Sanders to get on board with broad-based debt relief, and he soon outflanked Warren: whereas she proposed cancelling up to fifty thousand dollars of debt per person, he pledged to cancel all of it.

      Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction

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