Did The Biden Administration Just Send A Big Signal On Student Loan Cancellation?
US President Joe Biden makes his way to board Air Force One before departing from Cherry Capital ... [+] Airport in Traverse City, Michigan on July 3, 2021. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images) AFP via Getty Images  The Biden administration may have just given proponents of broad student loan forgiveness a reason to hold out hope that the President will take action on student debt. The U.S. Department of Education announced this week that it would be hiring Toby Merrill as Deputy General Counsel. Merrill previously founded and directed the Project on Predatory Student Lending, a legal services organization that represents low-income borrowers who have been harmed by the predatory practices of for-profit schools. The Project has been involved in long-running litigation involving the Borrower Defense to Repayment program, which can provide student loan forgiveness to borrowers who were defrauded by their schools. More notably, however, Merrill helped draft a key legal analysis arguing that the President has authority to cancel student loan debt through executive action. Congress has granted the Secretary a more specific and unrestricted authority to create and to cancel or modify debt owed under federal student loan programs in the Higher Education Act (HEA) itself, wrote Merrill in the memo, along with two other attorneys. That provision empowers the Secretary to execute the broad debt cancellation plan [that Senator Elizabeth Warren] proposed. Warren had put forth a proposal during her 2020 presidential campaign to cancel student loan debt on a mass scale. The legal analysis pointed to a key provision in the HEA which gives the President, via the Secretary of Education, broad authority to compromise, waive, or release a borrowers obligation on federal student loan debt. Other student loan borrower advocacy organizations and members of Congress have cited this analysis to support their argument that President Biden should cancel student loan debt using executive action. Of course, not everyone agrees with the analysis. Attorneys acting under former Education Secretary Betsy DeVos argued that Congress did not intend for these provisions of the HEA to be used for mass student loan forgiveness. We believe any Executive Branch action on a blanket or mass basis, whether under [the HEA or other federal statutes], wrongfully transforms carefully cabined HEA settlement authority into a general administrative dispensing power, these attorneys wrote. Bringing on a student loan legal expert who has advocated for broad student loan cancellation does not conclusively mean that the Biden administration will enact widespread student loan forgiveness. Biden himself has expressed deep skepticism that he has the requisite authority to cancel student debt. He has also expressed concerns that broad student loan forgiveness could unfairly benefit wealthier Americans or graduates of elite universities  concerns that critics say are baseless and not rooted in facts or data. Nevertheless, in April, the President directed his administration to conduct a formal legal review of authorities that could be the basis for cancelling student loan debt using executive authority. There are no signs yet that this legal review has formally ended, or that any firm conclusions have been made, making the administrations recent hire potentially significant. The Joe Biden Administration is bringing in allies to the #cancelstudentdebt movement. This is huge! said Student Debt Crisis, a student loan borrower advocacy organization and proponent of mass student loan forgiveness, in a Tweet on Tuesday. Merrills appointment comes on the heels of another major hiring decision by the Department of Education. Richard Cordray was tapped in May to manage the federal student aid system. Cordray is the former director of the Consumer Financial Protection Bureau, a chief enforcement agency protecting consumers from harmful practices by financial institutions and loan servicers. Part of Cordrays job at the Department of Education will be overseeing federal student loan servicers, which have been accused of widespread mismanagement of key federal student loan programs. Observers have speculated that this could signal a looming crackdown on problematic student loan servicing practices.