DeVos mulled unilateral student loan forgiveness as COVID-19 wracked economy: memo

DeVos mulled unilateral student loan forgiveness as COVID-19 wracked economy: memo
© Bonnie Cash

Former Education Secretary Betsy DeVosBetsy DeVosDeVos's student aid chief resigns from Education Department Cardona seeks to pivot from DeVos era at Education Senate confirms Biden's Education secretary MORE considered whether she had the authority to forgive student loan debt during the onset of the coronavirus pandemic in March, but Trump administration lawyers determined it would be illegal, according to a memo released Wednesday.

As the initial spread of COVID-19 derailed the U.S. economy, the Trump administration allowed all borrowers with federally held student debt to halt payments and froze the accrual of interest on those loans.

But, according to a memo first reported Wednesday by The Wall Street Journal, DeVos considered going much further and wiping out some loans unilaterally, which progressives have urged President-elect Joe BidenJoe BidenSenate holds longest vote in history as Democrats scramble to save relief bill Ex-Trump appointee arrested in Capitol riot complains he won't be able to sleep in jail Biden helps broker Senate deal on unemployment benefits MORE to do upon taking office.


“At that time, the Secretary also considered her authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of the student loan principal, and/or to materially modify repayment amounts or terms,” wrote Reed D. Rubinstein, a Trump appointee serving as the Education Department’s top lawyer, in the memo signed Tuesday.

“[B]ut the Department’s Office of the General Counsel, in consultation with the Department of Justice’s Office of Legal Counsel, concluded she would lack statutory authority to do so,” he continued. “Our opinion has not changed.”

DeVos resigned Thursday after a violent mob of Trump supporters stormed the Capitol, claiming five lives and briefly preventing Congress from certifying the results of the 2020 presidential election.

It is unclear how seriously DeVos considered unilateral debt forgiveness or how broad the debt cancellation would have been if Trump administration lawyers determined it to be legal. Doing so would have likely prompted rare praise from Democrats and drawn potential backlash from Republicans, who are largely opposed to broad-based student loan forgiveness. 

The memo, which was finalized Tuesday, also does not explain why DeVos asked Rubinstein to formalize the administration’s opinion in writing 10 months after she first received it and less than two weeks before Trump leaves office.


Rubinstein’s memo is not legally binding, but seeks to refute arguments made by Democrats and borrower advocates that the Education secretary has broad authority to unilaterally forgive student loan debt, particularly in times of emergency.

Progressives such as Sens. Charles SchumerChuck SchumerLawmakers demand changes after National Guard troops at Capitol sickened from tainted food Ron Johnson forces reading of 628-page Senate coronavirus relief bill on floor Senate panel splits along party lines on Becerra MORE (D-N.Y.) and Elizabeth WarrenElizabeth WarrenSenate rejects Sanders minimum wage hike Philly city council calls on Biden to 'cancel all student loan debt' in first 100 days Hillicon Valley: High alert as new QAnon date approaches Thursday | Biden signals another reversal from Trump with national security guidance | Parler files a new case MORE (D-Mass.) have urged the Biden administration to cancel up to $50,000 in debt per borrower through executive action. That would wipe out all debt for roughly 80 percent of the 44 million Americans who owe part of the $1.5 trillion in outstanding student loans held by the government. 

Biden, however, has called for forgiving up to $10,000 per borrower through legislation, and may seek to include that plan in another coronavirus economic relief bill. The president-elect also expressed skepticism in his ability to forgive student debt without Congress in a call with newspaper columnists, according to the Journal.

“It’s arguable that I may have — the president may have — the executive power to forgive up to $50,000 in student debt,” Biden said, according to the Journal.

“Well, I think that’s pretty questionable. I’m not sure of that. I’d be unlikely to do that.”