COMMENTS SUMMARY

NCLA submitted comments urging the U.S. Department of Education to abandon a proposed rule that would have unconstitutionally cancelled over $100 billion of federal student loan debt owed to the Treasury. Congress had repeatedly declined to erase such debt itself, and the Department lacks authority to do so unilaterally.

The Department’s proposal would have cancelled specific loans held under the Federal Family Education Loan program, the Direct Loan program, and the Perkins program, and the Health Education Assistance Loan program. The Department claimed a section of the Higher Education Act of 1965 gave the Secretary of Education  power to cancel this federally-held student loan debt. In reality, the statute did not allow for the Department’s proposed rule.

The Supreme Court’s Major Questions Doctrine forbade the Department’s debt cancellation proposal. The plan would also have violated the Appropriations and Vesting Clauses in Article I of the Constitution, which reserves all legislative authority and power of the purse for Congress.

In December 2024, the Department of Education announced the withdrawal of this proposed rule, a victory for NCLA.