Desperate for something to crow about before the fall elections, the Democrats are pushing hard for Joe Biden to be generous and compassionate by canceling a vast amount of student-loan debt. This is a lousy idea, but is it even legal?
In this PowerLine post, attorney John Hinderaker looks at the argument that Congress has given the president this authority. He thinks that it is pathetic.
Hinderaker writes:
The reference apparently is to Sec. 432, Subdivisions (a)(5) and (6). That section describes the legal powers of the Commissioner. It gives him the power to sue and be sued. Subdivisions 5 and 6 empower the Commissioner to:
(5) enforce, pay, or compromise, any claim on, or arising because of, any such insurance; and
(6) enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right or redemption.
Here, “compromise” is obviously used to mean settle, as a lawsuit. So the Commissioner can sue to recover unpaid loans, he can enforce liens, and–of course–he can compromise or settle such claims and lawsuits. The idea that this entitles the Commissioner (or the president) to simply cancel all outstanding loan obligations is ridiculous.
I agree completely. But then the legal argument behind the entire student-loan program is equally ridiculous. Nothing in the Constitution authorizes Congress to loan money to college students (or any other group). If FDR and the New Deal Congress had tried to set up federal student aid, the pre–New Deal Court would have declared it unconstitutional. But federal student aid was enacted in 1965 and the Court was stuffed with “progressives” and by that time, earlier Court decisions had eviscerated the Constitution’s limits on federal authority. To my knowledge, there was never a legal challenge to the federal student aid programs — but there are still unwarranted.