WASHINGTON -- As the Department of Education’s handpicked negotiators meet today to deliberate the Biden administration’s latest student debt transfer scheme, Sen. Chuck Grassley (R-Iowa) is exposing the panel’s bias and pushing back on the president’s unrelenting overreach. Grassley is leading the effort alongside Sens. John Cornyn (R-Texas), Thom Tillis (R-N.C.), Tommy Tuberville (R-Ala.) and Tim Scott (R-S.C.).
In a letter to Education Secretary Miguel Cardona, the senators wrote, in part:
“The Department is not only clearly exceeding their statutory authority, but such a blatantly biased panel of negotiators shows that this process is simply a means to an end. Negotiated rulemaking is meant to balance the concerns of disparate groups as they attempt to reach an agreement on regulatory provisions regarding Federal Student Aid. However, the panel of 14 negotiators selected by the Department consists overwhelmingly of borrowers and representatives of institutions of higher education who directly stand to gain from enabling wide parameters for forgiveness on student loans and conveniently provide you with a fig leaf of political cover for your pre-stated goal of this rulemaking.”
Background:
President Biden originally tried wielding executive emergency powers to require taxpayers pay off the value of other borrowers’ student loans. Just hours after the Supreme Court deemed the move unconstitutional, the Biden administration announced it would pursue a fast-tracked rulemaking as an “alternative path.”
As part of this process, the Department of Education assembled 14-person panel to negotiate a proposed rule. The agency’s selections conveniently exclude the 87 percent of taxpayers who have either already paid off their loans, did not take out loans or chose not to attend college. If the Biden administration finalizes its student debt transfer plan, individuals belonging to those groups will incur the estimated $400 billion cost.
Grassley and his colleagues assert that using the regulatory process this way “not only makes a mockery of negotiated rulemaking under the [Higher Education Act], but also of the separation of powers.” The senators are urging the Biden administration to work with them by supporting their legislative package to help students handle college expenses. The package incorporates Grassley-led solutions including the Know Before you Owe Federal Student Loan Act and the Understanding the True Cost of College Act.
Read the senators’ full letter HERE and below. Audio of Grassley discussing the issue this morning with reporters can be downloaded HERE.
October 9, 2023
Dear Secretary Cardona,
Before you begin a precedent-setting negotiated rulemaking to end-run the Constitution to provide President Biden’s promise of broad student loan forgiveness, we ask you to dispense with this partisan policymaking charade. Instead, join us in pursuing legal legislative solutions for federal student loans.
On October 10 and 11, 2023, the Department of Education (the Department) plans to begin negotiations on a student loan cancellation rule. This rulemaking effort is based on an announcement from June 30, 2023, the same day the Supreme Court struck down as unconstitutional the Department’s first effort to cancel student debt. You stood beside the President that day as he formally announced his intention to circumvent the Supreme Court through this negotiated rulemaking process.
A Department fact sheet released on June 30, 2023 stated: “The Secretary of Education initiated a rulemaking process aimed at opening an alternative path to debt relief for as many working and middle-class borrowers as possible, as fast as possible…” This rulemaking process attempts to regulate language unchanged since 1965 within Section 432(a) of the Higher Education Act (HEA) of 1965, which authorizes the Secretary to “compromise, waive, or release any right, title, claim, lien, or demand” within the Federal Family Education Loan (FFEL) program. In fact, language in Section 432(a) predates the HEA and the Department as part of the National Defense Education Act of 1958.
Your blatant attempt to subvert the Constitution via a regulatory process not only makes a mockery of negotiated rulemaking under the HEA, but also of the separation of powers. Article I Section I of the Constitution states, “All legislative powers herein granted shall be vested in a Congress of the United States.” Congress has not passed any legislation giving the Secretary, or anyone in the Executive branch, the authority for mass cancellation of student loans.
The lack of authority is further evident by the fact that there is no precedent for providing mass student loan discharges under the current administration through section 432(a)to groups of student borrowers without a link to an otherwise outlined statutory discharge authority. Any time Congress has intended to provide the Department with group discharge authority, it has expressly done so. These instances include closed school discharge in Section 437(c) and Borrower Defense to Repayment in Section 455(h).
The Department is not only clearly exceeding their statutory authority, but such a blatantly biased panel of negotiators shows that this process is simply a means to an end. Negotiated rulemaking is meant to balance the concerns of disparate groups as they attempt to reach an agreement on regulatory provisions regarding Federal Student Aid. However, the panel of 14 negotiators selected by the Department consists overwhelmingly of borrowers and representatives of institutions of higher education who directly stand to gain from enabling wide parameters for forgiveness on student loans and conveniently provide you with a fig leaf of political cover for your pre-stated goal of this rulemaking.
Your choice to conveniently exclude the interests of taxpayers who paid their loans, did not take student loans, or did not attend college removes any pretenses of fairness from this panel. The 87 percent of Americans with no student loan debt have no input, instead they are left with the $400 billion projected price tag of the program—or over four times the Department of Education's fiscal year 2023 budget.
Josh Divine, Solicitor General of the State of Missouri, Marc Goldwein, Senior Vice President and Senior Policy Director for the Committee for a Responsible Federal Budget, and Michael Mohr-Ramirez, Government Affairs Manager of Taxpayers Protection Alliance, were each nominated but turned away from effectively having their voices at the negotiation. In their place, the Department chose negotiators who have been very clear that they already agree with the administration’s stance. Rather than choose those skeptical about student debt cancellation, the Department selected negotiators who have expressed their disappointment that President Biden “might cancel just $10,000” and have proposed increasing subsidies for student loans.
We are gravely concerned that the Department is undertaking a blatant political process with a predetermined outcome to achieve one of the President’s campaign promises at all costs. We urge you again to abandon this mockery of a rulemaking process. It is unfair to string student loan borrowers along for political purposes in a process that is undoubtedly deficient to stand up in a court of law.
We invite you and the President to pursue legal reforms through the legislative process. We have already introduced the Lowering Education Costs and Debt Act to serve as an offer on the table. Our phones are ready and our doors are open.
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