Secret memo from Obama DOE lawyer: Executive student debt forgiveness may lose in court

President Joe Biden may not have the clear legal authority to broadly cancel student loan debt by executive order, according to the Obama administration’s top Education Department lawyer.

Biden has signaled to Congressional Democrats last week that he is seriously considering student-loan debt forgiveness via executive action.

However, legal experts have debated whether or not the president has the authority to do so.

Charlie Rose, the Education Department’s general counsel from 2009 to 2011, said that loan-servicing companies may have cause to sue over broad actions on student debt relief, according to a private legal analysis he wrote obtained by The Wall Street Journal.

“If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation,” Rose wrote in a memo for his law firm, Hogan Marren Babbo & Rose, Ltd., according to WSJ.

Specifically, using executive action to cancel debt without tying relief to their individual needs or using current regulatory procedures may leave room for his plan to be overruled in court, according to the memo.

The analysis is dated May 7, 2021, and labeled “strictly confidential.”

In an email to WSJ, Rose confirmed the memo was prepared for a private client and was never meant to be shared with the public.

The administration has extended the pause on student loan payments to Aug. 31 but not yet provided specifics for its debt relief plans.

The Congressional Hispanic Caucus said that Biden reacted positively to the idea of forgiving $10,000 in student loan debt per borrower – the amount he campaigned on during his presidential run in 2020.

This is much less than the $50,000-per-borrower sought by some Democratic legislators, like Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY).

Biden is considering limiting any student loan forgiveness to borrowers who make less than $125,000 a year, White House press secretary Jen Psaki said on Tuesday.

This may be an answer to research that shows that much of American student loan debt was owned by the wealthiest U.S. households.