Buzz
Ask any political science professor, and they'll tell you that presidential candidates often dream of more than what they can realistically achieve. The president’s influence on policy is limited by the checks and balances system. They need Congress to approve laws that would lead to significant policy changes.
However, Senator Elizabeth Warren has so many proposals for her potential presidency that she is already revealing how she might sidestep Congress entirely to make things happen.
Warren believes that the Department of Education has the authority to begin reducing our national student loan debt and reforming the higher education system. She outlined her approach in two major points on her website yesterday. Let's dive into them one by one.
First, let's talk about the debt:
I will instruct the Secretary of Education to utilize their authority to begin modifying and restructuring federal student loans in line with my plan to cancel up to $50,000 in debt for 95% of student loan borrowers (around 42 million people).
Sounds great. But how can this be done?
The Secretary of Education has the power to authorize student loan cancellation beyond the current forgiveness programs through the Higher Education Act (HEA). This 1965 law is the most comprehensive piece of legislation detailing the federal government’s role in higher education. There is a vague provision in the HEA that grants the student loan commissioner (the head of education before the secretary role was created) the authority to modify agreements or loans made under this title and to compromise, waive, or release any rights or claims arising from it.
(Fun fact: The HEA has been updated multiple times, the latest being in 2008. It was supposed to be reauthorized in 2013, but that hasn't happened yet.)
Warren also aims to streamline the application process for existing student loan relief programs and eliminate the backlogs of pending applications. She argues that by doing so, she will help another 1.75 million people, in addition to the 42 million beneficiaries of her initial plan to cancel $50,000 in student loan debt.
One more point: Warren wants to make it easier to discharge student loan debt in bankruptcy. Currently, if you file for bankruptcy, student loan debt can only be discharged if you pass an “undue hardship” test. “Until Congress acts,” she writes, “I will direct my administration to stop opposing borrowers’ bankruptcy petitions and will advocate for a more lenient interpretation of undue hardship.”
Additionally, she emphasizes that she will urge Congress to make public colleges tuition-free, expand and increase Pell Grants, and boost funding for Historically Black Colleges and Universities and Minority Serving Institutions.
Next, let’s discuss the second part of her plan to overhaul the higher education system without needing Congressional approval:
I will also instruct the Secretary of Education to use all available powers to regulate the for-profit college industry, curb predatory student lending, and address racial inequalities in our higher education system.
Warren plans to instruct the Office for Civil Rights within the Department of Education to investigate the impact of schools, state governments, and the student loan industry on borrowers of different races. She references multiple reports showing that minority students tend to borrow more for college and take longer to pay off their loans. “We will review the entire system, from state funding and institutional aid to loan servicing practices, fines and fees on defaulted loans, and access to repayment and cancellation options,” she writes.
She will also tighten regulations on for-profit colleges that disproportionately enroll low-income and minority students, and she will reorganize the Department of Education’s office that investigates fraud related to these schools. Furthermore, she intends to reinstate the student loan division of the Consumer Financial Protection Bureau.
While Warren works on these initiatives, she will push Congress to end federal funding for for-profit colleges.
College affordability was a topic during the Democratic presidential debate in Iowa last night, though Warren did not mention her student loan forgiveness plan.
