Bloomberg Law
Aug. 26, 2022, 9:00 AMUpdated: Aug. 26, 2022, 7:11 PM

Student-Loan Relief Draws Scrutiny for Leaning on Covid-19 (1)

Kaustuv Basu
Kaustuv Basu
Courtney Rozen
Courtney Rozen

President Joe Biden‘s move to forgive billions in student loans, as part of his administration’s response to the Covid-19 pandemic, is drawing the same sort of legal scrutiny he’s received for policy changes he made without specific permission from Congress.

Biden’s student loan plan relies on the Higher Education Relief Opportunities for Students Act, known as HEROES. It allows the agency to waive federal student loan requirements to support borrowers in an emergency, such as a natural disaster or war. Congress passed it to help borrowers serving in the military in the wake of the Sept. 11 attacks.

Bharat Ramamurti, a top economic aide to the president, said during a White House press conference Friday that Biden’s actions were legally justifiable.

“The president was clear from the beginning that he did not want to move forward on this unless it was clear that it was legally available to him,” he said. “One of the first things he did when he came into office was to ask for that legal opinion and got the answer that, yes, options were available to him that were legally permissible under that law.”

In this instance, Biden is saying that Covid-19 pandemic is such an emergency, even as deaths and infection rates fall significantly. The US has 43.4 million borrowers with federal student-loan debt, according to the Education Data Initiative.

“One question is whether Covid-19 is a national emergency for the purposes of this statute,” said Daniel Rodriguez, a law professor at Northwestern University.

Biden throughout his presidency has encountered dubious judges by making policy through executive or regulatory action, including with his vaccine-or-test mandate and moratorium on evictions.

“If this is the best argument they’ve got, then I would be skeptical that they can do this until they come up with a better argument,” said Jed Shugerman, a Fordham University law professor.

National Emergency?

The gist of the legal challenge could boil down to whether the Department of Education has the authority to forgive student debt.

The Trump administration cited HEROES to justify extending a repayment pause in student loans through the end of January 2021, after Congress declined to continue it. But it also issued a legal opinion in its closing days in office that that the president doesn’t have the authority to unilaterally forgive student debt.

“Congress never intended the HEROES Act as authority for mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify repayment amounts or terms,’' Reed Rubinstein, then the Education Department’s principal deputy general counsel, said in that memorandum.

Biden’s announcement this week rescinded that legal opinion.

“We have determined that although it accurately describes the core features of the HEROES Act, its ultimate conclusions are unsupported and incorrect,’' Lisa Brown, the Education Department’s general counsel, said in a memoto Education Secretary Miguel Cardona.

Rubenstein now works for America First Legal, a group started by former Trump administration officials. He didn’t return a message seeking comment.

Biden’s Justice Department said one objective of HEROES was to ensure that “recipients of student financial assistance . . . are not placed in a worse position financially in relation to that financial assistance because of” a national emergency. It said Covid-19 met that criteria.

The memos this week from the Justice and Education Departments aren’t the final word on the issue, Shugerman said. “There is likely to be another round of memos and explanations coming out of the Department of Education, when when they formalize and finalize the policy,” he said.

Authority to Challenge

Administrative law experts debate who would have the authority, or the legal standing, to challenge the Biden administration’s decision.

“Certainly loan servicers and holders of some of the derivatives, but even within the student universe, students have a right to,” weigh in on agency policy, said Ted Frank, director at the Hamilton Lincoln Law Institute.

The Biden administration is making arbitrary decisions without the opportunity for the public to provide input, Frank said. “Somebody who’s on the wrong side of those arbitrary decisions, would have standing to complain that they didn’t have the procedural protections that the law entitles them to,” he said.

The Supreme Court has taken a narrow approach to legal standing, Rodriguez said.

“I am skeptical of this. The only conceivable route to standing is an action of a state official, like a state attorney general,” he said. “I’m thinking for example of Obamacare, the Affordable Care Act. I’m not that optimistic that a court would accept that challenge from an attorney general.”

Major Questions

Another looming issue is the major questions doctrine, a belief that has become increasingly prominent with the arrival of Trump’s appointees to the federal bench. The legal approach states that federal agencies can’t implement policies without express permission from Congress.

The major questions doctrine was rarely argued in federal courts by name before 2018, according to a Bloomberg Law analysis, but is growing in popularity. The phrase appeared a record 69 times in federal filings in 2021, according to the analysis.

“That’s a very powerful and controversial tool that the Supreme Court has used to narrow the scope of administrative agency authority,” Rodriguez said. “Will the court accept this delegated authority to the Department of Education to forgive student loans in the absence of a specific statute?”

(Updates with Biden adviser starting in third paragraph )

To contact the reporter on this story: Kaustuv Basu in Washington at; Courtney Rozen in Washington at
To contact the editor responsible for this story: Bernie Kohn at

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