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1 1 (September 13, 2022)

handle is hein.crs/goveiug0001 and id is 1 raw text is: Congressional ______ ~ Research Service Statutory Basis for Biden Administration Student Loan Forgiveness September 13, 2022 On August 24, 2022, President Joe Biden announced a plan to cancel or reduce federal student loan balances for borrowers with annual income in 2020 or 2021 below $125,000 or household income below $250,000 (categorical cancellation). The program will generally offer cancellation of up to $10,000 per eligible borrower, or up to $20,000 of cancellation for eligible borrowers who are also prior Pell Grant recipients. According to the Department of Education (ED), categorical cancellation seeks to address the financial harms of the pandemic by helping borrowers transition back to repayment status following the end of the pandemic-related pause on loan repayment, interest accrual, and involuntary collections. The pause is scheduled to end on December 31, 2022. Alongside this announcement, the Biden Administration revealed its legal justification for categorical cancellation. In an opinion dated August 23, 2022, the Department of Justice's Office of Legal Counsel (OLC) concluded that the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, as amended, authorizes the Secretary of Education (Secretary) to relieve borrowers of the obligation to repay federal student loans. This relief, OLC explained, could in some cases be justified under the HEROES Act as a response to the COVID-19 pandemic. OLC's opinion rejects a more limited reading of the statute articulated at the end of the Trump Administration, including in a January 12, 2021, memorandum written by ED's then-Principal Deputy General Counsel Reed Rubinstein (the Rubinstein Memorandum). Categorical cancellation appears poised to substantially reshape ED's federal student loan portfolio. The action reflects a use of ED's HEROES Act authority that is unlike past invocations. For the first time, ED plans to use this authority to directly and permanently discharge at least a portion of borrowers' student loan debt. Categorical cancellation would also result in the federal government forgoing collection rights as to tens of millions of borrowers. According to the White House, roughly 20 million borrowers will be eligible to see their full remaining balance canceled, while another 23 million borrowers will be eligible to see their balance reduced. This Sidebar examines the asserted statutory basis for categorical cancellation and the legal debate surrounding ED's action. Congressional Research Service https://crsreports.congress.gov LSB10818 CRS Legal Sidebar Prepared for Members and Committees of Congress

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