Hinderaker Should Read… The HEROES Act, And Its Associated Rules…

Sigh. Hinderaker — without so much as a simple Google search, made the bald-faced statement that Mr. Biden lacks authority… to forgive student loans.

In literally three minutes of just my Google searching, I offer this, the actual answer to John’s supposed conundrum. It comes from Sections 209 and 221 of the rules adopted under the HEROES Act. [Tangerine used this provision as well, just FYI.]

As a bit of background, low income borrowers have always (since the 1980s — I know, because I was one of them!) been able to defer any payment, principal or interest, by making annual showings of low income status. [I long ago repaid mine in full, with all the interest, then at 7 per cent per annum, right after passing the bar.]

In any event, the Secretary (in the Executive Branch) is empowered, under 34 CFR 685.209 & 685.221, to waive even that annual income submission paperwork — as Tangerine directed, and the Secretary actually executed — in mid-2020.

So — should Mr. Biden desire to do so, he could (through the Secretary) simply “make permanent” under 34 CFR 685.209 & 685.221, the no-paperwork… deferrals.

That five GOP House members are trying to introduce a NEW bill to block this approach (a bill that will never make it out of committee, BTW)… is a tacit admission by the GOP/right that this power is clearly already established as part of the Executive Branch’s delegated powers, by statute in the HEROES Act.

Specifically, Sections 685.209 and 685.221 provide that a borrower participating in an income-driven repayment plan is required (unless waived by the Secretary) to provide documentation, acceptable to the Secretary, that enables the annual calculation of the borrower’s payment amount for each year that the borrower remains on the plan, unless waived. The Secretary may so waive, under §§ 685.209(a)(5)(i) and 685.221(e)(1), without time limited duration.

That the end of the story.

Or… perhaps, since no specifics have been announced, it could be that Mr. Biden only directs this “permanent” waiver toward low income borrowers — to shut down Hinderaker’s more than occasional howling about “rich kids” getting off from student debts. Most rich kids, in my experience, use mom and dad’s money — not student loans.

But whatever.

Mr. Biden could also say that if a kid with student debt creates more than say a million dollars of net cash taxable income in any single (future) year, he must repay his/her original principal balance to the federal government, on top of his income taxes that year. That seems emminently fair, given what would have been much earlier help in getting started.

Left unsaid here is the notion (of course!) that some portion of the student debts will be covered by the feds (repaid to the lenders, on behalf of those… so waived) — except perhaps — as to predatory for profit student lending scams.

But make no mistake, Mr. Biden does possess this power.

Sit this one out, John — as you didn’t complain, when Tangerine did it.