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Biden Is Trying to Work Around SCOTUS on Student Debt

Joe Biden is more than a bit miffed at the Supreme Court ruling that the secretary of education may not waive student loan debt, even though the HEROES ACT passed by Congress specifically says the secretary of education may modify or waive student loan debt. Congress fully intentionally decided to give the secretary the power to decide when that was in the national interest, but the Court didn't like the idea, so it pretended it didn't see the word "waive" in there. Or maybe it misread it for "wave."

In any event, Biden is trying again, but at a smaller scale. He announced on Friday that the secretary will waive (i.e., cancel) $39 billion in student loan debt owed by 804,000 borrowers whose debts have been outstanding more than 20 years. This is based on a different law. This one says that if someone is up to date on loan payments and is still in debt after 20 (or in some cases, 25) years, the secretary may forgive the remainder of the debt. Also, the forgiveness cancels out some errors made by loan servicers over the years. Will this one pass muster? If the Supreme Court reads the law, yes, but if it ignores the actual original wording again, then no.

The relief goes only to loans directly owned by the education department, not by a private bank. That's not everyone, but for the lucky 800,000, the debt cancellation will surely be appreciated. However, that is a drop in the bucket compared to the 45 million people who have student debt. Their loan payments have been paused due to the pandemic, but will restart at the end of September.

Biden is keenly aware that many people with student debt were hoping he would cancel it. Some people who took out loans and paid them back in full are angry about letting some people off the hook. On the other hand, many government programs let some people off the hook. For example, millions of small businesses got loans during the pandemic and if they met certain conditions, the loan was forgiven. Why do they get debt relief and businesses that repaid their pandemic loans don't? There are a large number of programs in which the government gives some group of people money and another group no money. These are political decisions and if Congress authorized it, it should happen, even if it leads to asymmetries. (V)

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