Federal Agency Contradicts Biden, Says Student Loan Cancellation Not in Effect

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Another wrinkle has been introduced into the short, tortured existence of President Joe Biden’s student debt cancellation plan. On Friday, the U.S. Government Accountability Office issued an opinion stating that the Biden administration’s student loan cancellation is not in effect because it’s a rule that “substantially impact[s] the rights and obligations” of private parties, and such rules must be submitted to Congress before taking effect.

The GAO’s ruling provides Congress with a previously unavailable opportunity to weigh in on mass student debt cancellation. And several Republicans are seizing their moment.

Following the GAO’s ruling, Sens. Bill Cassidy, R-La., John Cornyn, R-Texas, and Joni Ernst, R- Iowa, announced that they “will introduce a Congressional Review Act (CRA) resolution to overturn President Biden’s student loan cancelation scheme, which would transfer up to $20,000 in student loan debt per borrower onto taxpayers, costing an estimated $400 billion.”

The Biden administration designed its cancellation plan to circumvent Congress. The strategy was formulated by executive branch lawyers without congressional or public input. So, it was no surprise when the administration took the position that Congress could not have a say on the cancellation plan by invoking the Congressional Review Act.

In correspondence with the GAO, the administration maintained that the HEROES Act, the putative source of its debt cancellation power, permitted it to act without observing the Congressional Review Act’s requirements.

But the GAO determined that Congress did not give the Department of Education carte blanche when it wrote in the HEROES Act that the department could take emergency measures “notwithstanding” other laws: “Laws that are not contrary to the design of a ‘notwithstanding’ clause will continue to apply despite that clause … Here, the ‘notwithstanding’ clause in the HEROES Act does not exempt [the Department of Education’s] Waivers and Modifications from CRA.”

By rejecting the Biden administration’s assertion that its action was unreviewable, the GAO rightly preserved Congress’ role in supervising the administrative state and afforded Congress the opportunity to debate the merits of mass debt cancellation.

The previously mentioned senators are poised to make use of that opportunity and force their colleagues in both houses to take public positions on the propriety of the Biden administration’s plan. Were Congress to use its disapproval power under the Congressional Review Act successfully, then student loan cancellation would be dead, and the cases currently before the Supreme Court challenging the secretary of education’s authority to cancel the debt would be moot.

Still, there’s reason to question how meaningful this exercise will be. Even as the senators draft a resolution of disapproval, that resolution would need to garner enough support in both houses not only to pass but to override the inevitable presidential veto as well.

Moreover, the GAO observed that the Department of Education could still invoke the “good cause” exception that would allow the cancellation program to take immediate effect, though the department still must notify Congress about its decision and properly invoke the exemption.

If Congress fails to disapprove or the department successfully invokes the good cause exception, the administration would still be prevented from implementing the program under the Supreme Court’s current injunction, holding off any debt cancellation pending its final ruling on the merits of the cases currently before it. The GAO generally avoided addressing the disputes being litigated before the Supreme Court.

One area of tension between the Biden administration and the GAO’s ruling concerns the applicability of the Administrative Procedure Act to the cancellation plan. Student loan borrowers in Department of Education v. Brown, one of the cases before the Supreme Court, argue that they were injured when the government denied them the opportunity to participate in formulating the forgiveness plan, a process usually required under the Administrative Procedure Act.

The GAO, for its part, took the position that “Congress contemplated that procedural requirements like those in … APA could continue in force without presenting any conflict with the [HEROES Act],” which seems to favor the borrowers’ argument.

However, HEROES and the Administrative Procedure Act are to some extent unavoidably in conflict because HEROES, when validly invoked, expressly allows the secretary of education to forgo the typical requirement of public notice and comment under the Administrative Procedure Act.

This specific conflict is not addressed in the GAO’s opinion, and perhaps that is not surprising because the question before the GAO was the applicability of the Congressional Review Act, not the Administrative Procedure Act.

Still, the logical conclusion is that if the Biden administration was justified in its reliance on the HEROES Act in the first place, then it was entitled to forgo notice and comment so long as it abided by the reporting obligations of that statute and the Congressional Review Act.

The GAO disclaimed any intent to wade into the boggy merits of the questions before the Supreme Court, stating that it “need not reach the more specific conclusion about the substantive validity” of the Department of Education’s actions in order to conclude that even a valid exercise remains subject to congressional review under the Congressional Review Act.

When the court itself heard those arguments in February, reactions from the justices’ bench were mixed, but a consistent note of skepticism sounded from at least five of the justices who seemed unconvinced that HEROES afforded the Department of Education the vast debt-erasing power the agency claimed.

Although the Congressional Review Act adds a new wrinkle to the saga that began last August, the Supreme Court is still most likely to be the body with the final say on student debt cancellation.

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The post Federal Agency Contradicts Biden, Says Student Loan Cancellation Not in Effect appeared first on The Daily Signal.

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