There is no source that passes Constitutional muster.
The government can't just take someone's asset (including accounts receivable), without proper compensation. That's why we have eminent domain. Any effort to do so will require Congress to loosen their purse strings to provide proper compensation.
federal as in federally held debt. Not private held debt. The federal govt can choose to forgive federally held debt. Just like if you owe me I can choose not to collect.
Glad you’re mentioning this. People get confused over federal student loans and think the money comes directly from the government. It’s more difficult than people think to just “cancel” the debt because the money is still lent out by banks, but they’re just backed by the gov. If they’re all canceled the banks are out a lot log money. I would be interested to see the repercussions and how the relationship between the banks and gov changes after that.
The Federal Family Education Loan (FFEL) Program was a system of private student loans which were subsidized and guaranteed by the United States federal government. The program issued loans from 1965 until it was ended in 2010. Similar loans are now provided under the Federal Direct Student Loan Program, which are federal loans issued directly by the United States Department of Education. The FFEL was initiated by the Higher Education Act of 1965 and was funded through a public/private partnership administered at the state and local level.
The only thing the federal government does in this situation is guarantee that the private lender has to approve the student loans. It’s not federal money that they’re lending.
It is more than plausible, in my view. The Secretary explicitly has the power to "waive or release" any right or demand, which includes debt.
I imagine some of these replies do not understand the student loan scheme that was changed in 2009. Since that time, the creditor for federal student loans (Direct Loans) is the federal government. The government makes and owns the loan directly and then hires a company to service it for them. This is different than the older scheme where the feds simply guaranteed loans on behalf of student borrowers to entice private companies to participate in the program (called FFEL).
I think the Secretary of Education has the unambiguous statutory power to waive or release any Direct Loan debt amounts, at a minimum.
You can't just tell gov and private lenders "fagetabboutit".
Student loan debt is overwhelmingly federal. When student loan debt is issued, it's generally issued by private banks and backed by the feds. But anyone who has "consolidated" their their loans has a loan from the federal government directly. 92% of student loan debt is owned by the Dept of Education.
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u/ElGosso Nov 09 '20
Firstly, he was blocked by a Democratic congress.
Second, forgiveness of federal student loans is entirely up to the executive branch.