Former Obama administration official says Biden student loan cancellation plan would face legal challenges

A former lawyer for the Obama administration’s Department of Education predicted that the Biden administration’s attempt to cancel student debts by presidential order would face legal challenges. According to the Wall Street Journal, Charlie Rose, who served as chief counsel at the Department of Education from 2009 to 2011, made the legal assessment in an internal document shared at his law firm Hogan Marren Babbo & Rose.

The memo, which was sent last spring stated, “If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation.” In the memo, Rose explains that the government should instead utilize its regulatory authority to strive toward debt cancellation for debtors, which he believes would be more likely to pass legal muster.

The unearthing of Rose’s memo comes as the Biden administration considers unilateral action to cancel at least $10,000 in federally held student loans for each borrower who earns less than $125,000 per year. Payments and interest accrual for federally held student loans have been halted since March 2020, with the freeze recently extended until August 31. Recently, the Department of Education announced additional steps to execute existing student debt forgiveness programs for public employees and low-income borrowers. According to the administration, 3.6 million borrowers could see their loans forgiven as a result of the programs.

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