Comments on the Ministry of Education’s proposal to waive student debt rules

Washington, DC, Dec. 20, 2024 (GLOBE NEWSWIRE) — Today, as requested by the New Civil Liberties Alliance, the U.S. Department of Education announced the withdrawal of proposed rules that would have combined to unconstitutionally cancel more than $250 billion of federal student loan debt to the Treasury. NCLA had submitted comments in May 2024 and back in December calls on the Department to abandon these plans, pointing out that Congress has repeatedly refused to cancel such debt and the Department lacks the legal authority to do so unilaterally. NCLA celebrates this important victory in preventing abuse of executive power.

The department’s proposals, released in April and October, would have canceled hundreds of billions of dollars at taxpayer expense. The first plan included a wide range of loan cancellation proposals that the department estimated totaled nearly $150 billion. The second plan would have canceled at least $112 billion for borrowers the department deemed to be in “hardship” based on a 17-factor test the department invented out of thin air.

Despite withdrawing those plans, the department still maintains that part of the Higher Education Act of 1965 gives the Secretary of Education unlimited power to cancel any federally owned student loan debt. But the statute had never been invoked to broadly cancel student loan debt owed to taxpayers before, cannot be clearly read that way, and was never understood to authorize such action in the past. The government’s inaccurate reading of the law would have rendered other, already existing loan forgiveness programs completely redundant. The Supreme Court’s grand questions doctrine, which prevents federal agencies from resolving cases of “great economic and political importance” without express congressional authorization, prohibits the department’s proposal. The withdrawn plans also would have violated the Appropriations and Appropriations Clauses of Article I of the Constitution, which reserve all legislative authority and purse strings to Congress. NCLA will continue to hold the Department accountable for such plans to act far beyond its legal authority.

NCLA issued the following statement:

“The Department has repeatedly attempted to illegally cancel student loans for years, with courts stopping each of these schemes. We are pleased to see that the Department has finally learned its lesson and is withdrawing these two latest illegal loan cancellation plans.”
— Sheng Li, Litigation Counsel, NCLA

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