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Opinion Biden’s costly student loan plan could use a constitutional review

President Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House on Aug. 24. (/AP)

The Congressional Budget Office has weighed in on the ultimate cost of President Biden’s plan to forgive up to $20,000 per borrower in student loan debt, and the numbers are staggering: $420 billion, with the bulk of that impact over the next 10 years. That’s $180 billion more than the 10-year estimate the White House offered on Aug. 26, two days after Mr. Biden announced the proposal. Notably, that’s also roughly $50 billion more than the Inflation Reduction Act provided to address climate change. On the other hand, the CBO’s figure is lower than independent estimates from the Committee for a Responsible Federal Budget (between $500 billion and $650 billion over the next 10 years) and the Penn Wharton Budget Model ($605 billion to more than $1 trillion).

One way or another, it’s an expensive commitment. Also clear is the constitutional principle that the executive branch cannot spend money, let alone hundreds of billions of dollars, without a mandate from Congress. Mr. Biden says that such statutory authorization exists — but his legal argument is no less debatable than his cost estimate.

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According to the administration, the Heroes Act, initially enacted in January 2002 and made permanent in 2007, authorizes the Education Department to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” if necessary to keep borrowers from being “in a worse position financially” because of a war or national emergency. The administration’s position is that the covid-19 pandemic constitutes a sufficient emergency. This is an expansive reading of a statute that Congress passed after 9/11 with service members deployed to Afghanistan and, later, Iraq in mind; lawmakers almost certainly did not contemplate the wholesale relief that Mr. Biden is trying to set in motion.

Mr. Biden took a calculated risk that his plan would also prove immune from a lawsuit, because it creates millions of potential beneficiaries, but — despite its general cost to taxpayers — incurs on no particular plaintiff the “concrete and particularized injury” usually necessary to bring a case. However, a contender came forward Tuesday: Represented by the conservative Pacific Legal Foundation, Frank Garrison sued in an Indiana federal court arguing that the Biden plan, which for technical reasons would grant his $20,000 in relief even if he doesn’t ask for it, threatens him with a net financial loss because he would owe Indiana taxes on the forgiven loan. Thus, his complaint says, he has standing to challenge the plan, both as a presidential usurpation of congressional power and on the grounds that the administration did not go through proper administrative procedure before announcing it. The administration quickly countered by notifying borrowers that they may opt out of automatic debt forgiveness and told the court Wednesday it had already started removing Mr. Garrison from the eligible list.

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We hope someone can establish standing, because the issues seem worthy of review. If there is any abuse the Constitution was designed to prevent, it would be the distribution of vast sums of public money, based on little more than executive say-so. This is especially true when much of the benefit will go to people who are far from poor, but zero to the majority who either did not graduate from college, didn’t borrow or paid off their loans. The country needs a competent judgment on whether that is indeed what Mr. Biden is trying to do — preferably before he has actually done it.

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