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‘Like A Band-Aid On Gangrene’: Why Forgiving Student Loans Is Unconstitutional

This week President Joe Biden announced that he is going to forgive $10,000 of student loan debt for those who make less than $125,000 ($20,000 to Pell Grant recipients). Contrary to the pontification of the political pendants promoting the President’s plan, the debt does not magically disappear. Instead, the debt is transferred from the individual students to the national debt.

This student loan transfer program is an accounting gimmick taking over $300 billion in secured national debt and transforming it into unsecured national debt.

I agree that the cost of education has far outpaced inflation or the earning potential of students. Schools are not on the hook if the student can’t pay the loan back. Over the last several decades, school administrations have become bloated with bureaucracy. Schools are so focused on increasing their budgets that they are not ensuring that the students have the education necessary to enter the job market with skills that the workforce needs.

Many are talking about how unfair this is to those who chose not to take out student loans or have already paid them off. Regardless of whether this is fair or unfair, the biggest problem is that the U.S. Constitution does not give spending power to the president. Article 1, Section 7 reserves for Congress the power of the purse.

In reading the Fact Sheet put out by the White House, I could not find one word that even attempted to explain how the president had the authority to forgive these loans. I have studied this issue and I cannot find anyone who can show me any provision in the statute that gives the president this authority.

Late yesterday, however, the General Counsel for the Department of Education published a memorandum opinion revealing how they think the President is justified to make this loan transfer.

This memorandum is just the government lawyers opinion on how they think they can expand the authority of their boss. Congress gave the President the authority to modify the payment schedule of a loan during a local or national emergency so that a student who is affected by the emergency is not put in a worse position financially. 

This memorandum makes the false assumption that since the President can modify the payment schedule during an emergency, Congress intended them to be able to modify the outstanding balance. The memorandum does not change the fact that Congress has the constitutional power of the purse and they never gave the President the power to reallocate debt from secured debt to unsecured debt.

Our founding fathers believed that allowing Congress to control taxing and spending would be a strong check against the executive branch from becoming just like a tyrannical monarch. They understood the disastrous consequences that would occur if one individual could control the nation’s finances. 

Our founders understood the need to limit the powers of the executive. They understood the need to balance the powers between the states and the various branches of the federal government. Rather than give the executive power over the purse, our founders gave this power to Congress. Congress makes the decisions on how we spend our taxpayers’ dollars.

While some argue that we forgave large loans under the PPP, this is not a fair apples-to-apples comparison. Congress authorized the PPP program that way from day one. Businesses who took out PPP loans knew that if they dotted their i’s and crossed their t’s they would not have to pay that money back. Regardless of whether this was a good policy should not cloud the discussion about the president’s unprecedented power grab to render Congress unessential. If a president has the power over the purse, why have a Congress? Let’s just eliminate Congress, let’s just eliminate the Senate and the president will have complete control over every aspect of the federal government.

The terms set out by Congress on these student loans are that the student would have to pay it back and that they could not file bankruptcy to avoid paying the loan. A president does not have veto power over laws that have already been enacted by their predecessors. 

I agree we must have a serious discussion about the abuses that have led to the $1.6 trillion in student debt. We need to make these schools more responsive to the needs of the community and the students that they serve. However, two wrongs do not make a right. Just because schools have abused the student loan program, does not mean that we should throw away our constitutional republic and allow America to be ruled by a tyrannical dictator.

Transferring $300 billion of secured debt to unsecured debt is not going to fix the $1.6 trillion- problem. Even if Biden had the authority to transfer this student debt to the shoulders of future American taxpayers, this executive action is only paying lip service to the problems. Biden is just putting a bandaid on gangrene. There is a major problem that needs to be solved and Biden is just kicking the can down the road while placating his political supporters.

Mark Meuser is a constitutional attorney with the Dhillon Law Group. He is also the Republican candidate for U.S. Senate for the state of California.

The views expressed in this piece are those of the author and do not necessarily represent those of The Daily Wire.

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The Daily Wire   >  Read   >  ‘Like A Band-Aid On Gangrene’: Why Forgiving Student Loans Is Unconstitutional