You need to know, Student Loan Forgiveness Means Nothing For Student Loan Cancellation.
The heavily redacted student loan memo that student loan borrowers have been waiting for since April was finally made public through a Freedom of Information Act request. The memo, which purports to mention the president’s legal right to cancel student loans unilaterally without congressional approval, was released along with dozens of other emails from the U.S. Department of Education. The memo itself is redacted in full, so you won’t learn much from it.
This student loan memo means nothing for student loan cancellation
The heavily-redacted student loans memo that was released says nothing about student loan cancellation in its current form. Redactions in the memo make any conclusions regarding student loan cancellation unreasonable. The title of the memo confirms the topic, wide-scale student loan forgiveness, and how it relates to legal authority. While this isn’t breaking news, White House Chief of Staff Ron Klain confirmed in April that the Education Department was preparing a memo on exactly this topic. In spite of this, since the memo is redacted, it is unclear what its contents are, including any potential recommendations for student loan forgiveness.
There’s no evidence the Biden administration “hid” the memo on student loan forgiveness
The Biden administration is alleged to have purposefully “hid” the memo on student loan forgiveness. Several members of Congress, including Rep. Ilhan Omar (D-MN), have called for the release of the student loan memo. But it’s unclear if this is the whole memo, the only memo, or if the Education Department has completed any other memos. As the redactions are based on an attorney-client privileged communication, they should not be interpreted as an attempt to hide the contents of the memo. Under the Trump administration, the Education Department published a memo on student loan forgiveness, concluding that the president cannot unilaterally cancel student loans without congressional approval. The staff of Biden’s presidential campaign likely examined student loan forgiveness. The White House and the Education Department are likely to have analyzed the president’s legal authority as well. Therefore, focusing on this student loan forgiveness memo is understandable, but it is not the definitive memo on student loan cancellation.
Biden concluded he doesn’t have legal authority to cancel everyone’s student loan debt
Biden has already determined that he does not have the legal authority to cancel student loan debt without further Congressional authorization. By now, Biden would have canceled 10,000 student loans if he reached the opposite conclusion. Biden is free to change his position at any time. While he has targeted student loan cancellations to date, along with repeated calls on Congress to pass legislation canceling student loans, it seems he doesn’t believe the president has such legal authority. Therefore, this indicates that he does not intend to cancel everyone’s student loan debt.
The memo is non-binding and Biden can choose whether to enact student loan forgiveness
It’s not a proclamation, a court order, or legislation. A legal memo is a non-binding legal opinion. Klain explained in April that the president receives a variety of policy and legal recommendations, but the final decision on student loan forgiveness rests with him. The president can accept or reject the Education Department’s recommendations, just as he does daily with other recommendations he receives. Although, if Biden cancels everyone’s student loan debt, there may be legal challenges, which could delay the cancellation. So, if there is a dispute between the executive and legislative branches regarding constitutional power limits, a court could decide the outcome. Miguel Cardona, Secretary of Education under the Biden administration, says student loan forgiveness is still being explored. Biden does not seem to be inclined toward wide-scale student loan forgiveness. The Biden administration, however, has made a clear commitment – supported by action – to deliver more student loan relief and more student loan forgiveness.
How this affects your student loans
Understanding what this memo represents is crucial. If the memo recommends that Biden has legal authority, please don’t conclude that all your student loans will get canceled. Importantly, don’t think of it as “all we need is the memo to say he can cancel student loans, and then we can get automatic student loan cancellation.” No, it’s only a non-binding recommendation, not a court ruling. Again, Biden will make the final decision. Private student loans aren’t owned by the Education Department, so the legal analysis is likely limited to federal student loans. In addition, not every student loan borrower would qualify for student loan forgiveness. As an example, a leading proposal in Congress would limit student loan forgiveness to borrowers earning up to $125,000 annually. There may be student loan forgiveness, but you may not qualify. When or if the memo about student loan forgiveness will be released is unclear. Focus on your student loan repayment strategy in the meantime. It is imperative that you focus on the student loan relief due to the Covid-19 pandemic, which expires on January 31, 2022. To pay off student loans faster, make sure you understand all your options.