When it comes to canceling student debt, the Trump administration was the party of no. Biden is the party of 'conversations are continuing.'

President Joe Biden. AP Photo/Evan Vucci
Although Biden has not released a memo regarding his authority to cancel student loans, new documents indicate that he has had it on his desk from April.

In his last days of office, Trump issued a memo stating that he couldn't legally cancel student loans.

Both administrations could interpret the law in a different way.

His lawyers informed Betsy DeVos, Education Secretary, that it was illegal for her not to cancel federal student loans for 43 millions Americans in the final days of President Donald Trump’s time at the White House.

Uncertainty remains over the student-debt cancellation conversation under President Joe Biden. Jen Psaki, White House Press Secretary, stated that she had received "no updates" as recently as last month. It was revealed recently that the White House Press Secretary Jen Psaki had "no update" for six months. She had been working on a memo that outlined Biden's legal capacity to cancel the $1.75 Trillion problem.

Biden stated that he would cancel $10,000 of student debt per borrower during his campaign. He was not able to cancel student debts that were larger than $10,000, such as $50,000. Jen Psaki, White House Press Secretary, stated that the administration was reviewing whether executive action is possible. In April, White House Chief Of Staff Ron Klain stated that Biden had requested the Education Department to prepare an instruction on how broad student-debt cancellation should be done. He said it would take several weeks.

Seven months have passed and the Biden administration is still singing the same tune: there are ongoing conversations.

Education Secretary Miguel Cardona stated that loan forgiveness is a top priority. He spoke at The Atlantic's Education Summit last Wednesday. "And these conversations are continuing."

Even though Biden's camp has not made any progress, advocates and Americans in debt still hope for one thing: whether Trump's administration interprets the law differently. They are anxiously waiting for an update on the April memo that has remained stalled.

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Trump vs. Biden on student debt cancellation

The Debt Collective is the nation's first creditors' union. It obtained documents and emails from the Education Department via a Freedom of Information Act request. This revealed that a draft of the memo - titled "The Secret's Legal Authority to Broad-Based Debt Cancellation", - was in existence since April 5. Although it is believed that it circulated within the White House leadership the same day as the memo, it was first made available to the public this week in six pages of pink redactions.

Also, the documents indicated that the word "draft", which was in the header on April 8, was removed and that the memo took a new title that referred the the HEROES Act. This is the law that President Donald Trump and Vice President Joe Biden used to extend the pandemic pause for student-loan payments.

Redacted student-debt memo under HEROES Act authority. The Debt Collective

DeVos was informed in a memo that she had the authority to cancel student loans. She claimed that both the Higher Education Act (HEA) and the HEROES Act did not allow her to cancel student loans.

The DeVos memo stated that "Plain HEA terminology and context strongly suggest Congress did not intend the HEROES act as authority for mass cancellation of compromise, discharge, or forgiveness student loan principal balances and/or to materially alter repayment amounts or terms."

It all comes down to how the text is interpreted. DeVos' lawyers stated that the power to modify or waive any type of debt is limited to certain situations, such as a national emergency. However, "the Department has never relied upon the HEROES Act, any other statutory or regulatory authority, or interpretative authority, for the blanket cancellation or mass cancellation."

Others might disagree. Massachusetts Senator Elizabeth Warren was contacted last year by Harvard Law School's Legal Services Center and Legal Experts. They stated that while Congress has the power to cancel student loans, the Education Secretary has the power to reduce student debt to zero under the HEA.

Brewington stated that "we don't even have to read this memo to know what it is, which is that Biden has authority to cancel student loans."

Failure to release the memo constitutes a "political decision"

Americans aren't sure why Biden won’t tell them about their student debt. Brewington believes that withholding the information is a political decision.

Brewington stated that this is consistent with the political moves of the administration in relation to student-debt cancellation. This is an intentional move.

Biden may be waiting to cancel student loans at a politically favorable time, such as right before midterm elections. However, there is still frustration over the fact that the memo exists and that the administration "pretends that it doesn't exist in its entirety."

The problem is only getting worse. Insider has heard from a number of borrowers that they won't be able afford to start payments in February. They have been on pause for almost two years and some are convinced their debt will go away when they die.

A group of Democrats tried to speed up the process by giving the department two weeks to publish the memo. The October 22 deadline passed without any response from the department, disappointing both lawmakers and borrowers.

Insider reports that "millions of borrowers across America are desperate for student debt relief." Ilhan Omar, Minnesota Rep., said. "We are confident that the President can accomplish this with a stroke of a pen."

Omar stated that student-loan payments will resume in less than 100 days. Omar believes that borrowers require an answer.

She said, "Release that memo." "Cancel student debt."

Have a story about student debt that you would like to share? Reach out to Ayelet Sheffey at asheffey@insider.com.

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