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Can someone explain to me why this has turned into such a legal issue?
The state issued these loans that Biden is attempting to forgive, did it not? I would've thought it would go without saying that the state would then also have the power to forgive them. It's not like debt forgiveness isn't something countries don't routinely engage in, so this whole thing has left me perplexed.
The State as a whole pretty unquestionably has the power, and there have been (smaller) loan forgiveness in the past. While I'd argue that doing so for loans issued by third parties would fall afoul of the Contracts Clause, the courts have routinely and consistently held that this clause only limits individual states and not the federal government.
The President, however, does not have the power to unilaterally do so. The core component is the Appropriations Clause, which prohibits federal spending without legislative authorization. Courts don't accept purely constitutional arguments, but rather places where those constitutional problems impinge on specific people, so the exacts are a little removed, but they're all about this problem.
Probably have a takings claim
That is one thing they don't have.
Poster above (unless I am misreading) came in and said that federal government could render nukl and void an agreement between say you and me. If you were the beneficiary, that would fall pretty squarely within the takings clause putting aside bankruptcy proceedings.
That fact pattern is a bit different compared to the case at hand
But isn't the poster talking about student loan forgiveness, under which the lenders are paid? There is nothing taken from them.
Maybe. If the lender is paid, then agree no takings (or if takings fair compensation). It wasn’t clear from me the poster was positing the lender was paid.
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As I understand it the main legal issue is that congress didn’t appropriate the money to forgive the loans. Student loans where supposed to be a source of revenue (for example this is partially how Obama care was supposed to be financed https://www.wsj.com/articles/obamas-giant-student-loan-con-1480640259 note that this is from 2016) so it seems to be a bit of a stretch that a different older law (the hero’s act) would allow the excecutive to simply take all of this money and spend it on something else.
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Which part of the state has that power to forgive? The executive acting on what authority derived from what statute? The congress did not pass legislation directing the executive to do that forgiveness. The executive has a policy goal of doing so and is now reaching for some other statutory authority to implement it since in the US the executive cannot generally act unilaterally. The court case is whether that is or is not cricket.
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The state can, the legal question is who is permitted to authorize this on behalf of the state. The question exists because it was not explicitly authorized by Congress, the nominal source of state authority, so it needs to have been authorized by Congress in at least a roundabout way.
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