Can the President Just Forgive Student Loans?

Federal student loan borrowers received an email this weekend informing them that the loan forgiveness promised to them by the Biden Administration was on hold while the government faces constitutional challenges to the program. 

After nearly three years of paused payments implemented in the name of emergency Covid relief, in August, the president announced his plan to discharge $10,000 of every borrower’s debt, with Pell Grant holders receiving an additional $10,000 of relief. 

Many borrowers who have felt the strain to pay back these loans, which combined account for $1.75 trillion, were relieved by the announcement. But the celebrations were premature. As it turns out, President Biden didn’t actually have the authority to forgive student loans, as a series of legal challenges to the program have asserted. 

Now, the Department of Education has had no choice but to pause the program–possibly forever. 

There is no denying that there is a student loan crisis. There are 42.8 million Americans with student loan debt, and every single one of these loans was taken out before they had careers or any collateral to back up the tens of thousands of dollars they were borrowing. 

For young adults just barely out of high school, many couldn’t comprehend the idea that a college degree would not guarantee them a high paying job upon graduation. Even so, they chose to sign a contract and take on massive amounts of debt. 

Problematic as the skyrocketing debt certainly is, the executive branch is not allowed to bypass the Constitution in order to tackle the crisis. 

The Constitution’s promise of separation of powers makes it clear that no branch of the government can overpower or hijack the role of the other. The authority to make laws lies solely with the legislative branch, who has yet to pass any legislation regarding the discharge of student debt. 

Earlier this month, U.S. District Court judge in Texas Judge Mark T. Pittman declared the forgiveness program unlawful, calling it a “complete usurpation”of congressional authority by the executive branch. And he’s absolutely correct. 

It’s thanks to Judge Pittman’s ruling that the entire program now stands in jeopardy.

The separation of powers exist to ensure that each branch stays accountable to the people so that tyranny is kept at bay. If you allow any president to adopt an “ends justify the means” mentality, there is no telling what other issues will be solved with executive overreach. 

While many might be in favor of the government ignoring the Constitution if it means having their loans forgiven, they may not like it so much if a future president uses this precedent to enact policy changes with which they disagree. 

It is dangerous to give your political allies any power you would not want the opposition to use. 

Allow the Constitution to be ignored once, and it will most certainly be done again. History shows us that if you give the government even an inch more power than they are constitutionally granted, they will take a mile. 

Constitutional issues aside, the program does absolutely nothing to actually solve the student loan crisis. 

Biden’s plan does nothing to curb the issuance of new loans. It also included nothing about placing stricter standards on who could take out loans or how much could be given. Instead, the program doled out up to $20K in forgiveness while the executive branch sat back and hoped the problem would correct itself. Or, perhaps the real motive was to appeal to voters as the 2024 election cycle draws near. 

Borrowers shouldn’t be fooled. As long as the student loan program continues, tuition will also continue to rise which will push borrowers back into the arms of the government time and again to ask for more money. It’s a vicious and very expensive cycle. 

The Federal Reserve Bank of New York’s research found that for every $1 increase in the subsidized student loan cap, tuition rose about 60 cents.

This system is not sustainable. 

Drastic changes should be made to the system as it stands today, but the Biden solution is not the way. 

Generally speaking, forgiveness is not the right path for many reasons, economically it makes no sense and it puts taxpayers who never took out loans on the hook for other people’s decisions. But, if any form of loan forgiveness is to be enacted, it has to be created and passed by Congress, as the Constitution specifies. 

Put simply, President Biden doesn’t have the authority to just forgive student loans, and he should have never made that promise in the first place.