DeVos considered unilateral student loan forgiveness as COVID-19 destroyed economy: memo


Former Secretary of Education Betsy DeVosBetsy DeVosDeVos Says ‘Principles Have Been Overtaken By Figures’ in GOP GOP Lawmakers Urge Cardona Against Wiping Out of Student Loans for Executives More insidious takeover than attempted Jan 6? FOLLOWING examined whether it had the power to write off student loan debt at the start of the coronavirus pandemic in March, but lawyers for the Trump administration have determined it would be illegal, according to to a memo published Wednesday.

As the initial spread of COVID-19 derailed the U.S. economy, the Trump administration allowed all borrowers with federally-held student debt to suspend payments and froze the accumulation of interest on those loans.

But, according to a note first published Wednesday by The Wall Street JournalDeVos considered going much further and unilaterally canceling some loans, which progressives urged. President-elect Joe BidenJoe BidenBiden to welcome lawmakers to the White House next week amid deadlock on his agenda Progressives hit back after moderates targeted Pelosi John Kerry expresses optimism about upcoming climate summit MORE to be done upon taking office.

“At that time, the secretary also considered her authority to provide a blanket or massive cancellation, compromise, discharge or remission of the principal of the student loan, and / or to significantly change the amounts or terms of repayment” , wrote Reed D. Rubinstein, a Trump nominee as the Department of Education’s top lawyer, in the memo signed Tuesday.

“[B]But the office of the legal adviser of the ministry, in consultation with the office of the legal adviser of the ministry of Justice, concluded that it would not have the statutory power to do so, ”he continued. “Our opinion has not changed.”

Of yours resigned Thursday after a violent mob of Trump supporters stormed the Capitol, killing five and briefly preventing Congress from certifying the results of the 2020 presidential election.

It’s unclear how seriously DeVos took unilateral debt cancellation or how broad the debt cancellation would have been had Trump administration lawyers determined it was legal. It likely would have garnered scant praise from Democrats and sparked a potential backlash from Republicans, who are widely opposed to a widespread student loan forgiveness.

The memo, which was finalized on Tuesday, also doesn’t explain why DeVos asked Rubinstein to formalize the administration’s notice in writing 10 months after receiving it for the first time and less than two weeks before. that Trump does not step down.

Rubinstein’s memo is not legally binding, but seeks to refute arguments made by Democrats and borrower advocates that the Education Secretary has broad authority to unilaterally cancel student loan debt, particularly by emergency.

Progressives like Sens. Charles SchumerChuck SchumerTrump teases Schumer over occasional Ocasio-Cortez challenge Biden sees independent support abandoning Democrats remaking America with taxpayer money MORE (DN.Y.) and Elizabeth warrenElizabeth WarrenSenate Democrats Reduce Tension Manchin The Hill’s Morning Report – Presented By Alibaba – Democrats Still Disagree On Biden On The Money Agenda – Democrats Dig With Biden Agenda In The Balance MORE (D-Mass.) Urged the Biden administration to cancel until $ 50,000 in debt per borrower by the action of the executive. This would wipe out all the debts of about 80% of the 44 million Americans who owe a portion of the $ 1.5 trillion in outstanding student loans held by the government.

Biden, however, has called for forgiving up to $ 10,000 per borrower through legislation, and could seek to include this plan in another coronavirus economic relief bill. The president-elect also expressed skepticism about his ability to cancel student debt without Congress during a call with newspaper columnists, according to the Journal.

“Arguably, I can have – the president can have – the executive power to waive up to $ 50,000 in student debt,” Biden said, according to the Journal.

“Well, I think that’s pretty questionable. I’m not sure of it. I probably wouldn’t do that.

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