DNC’s Richmond insists Biden has power to forgive student loans despite Pelosi’s past claim otherwise

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President Biden’s gift of $10,000 in student loans to many Americans is likely to face legal challenges, but Democratic National Committee senior adviser Cedric Richmond insists Biden will prevail.

During an appearance on “Fox News Sunday,” Richmond defended the legality of the decision, though House Speaker Nancy Pelosi and even Biden himself have appeared to take a different stance in the past.

“People think the president of the United States has the power to cancel debt. That’s not the case,” Pelosi said last year. “He can postpone, he can delay, but he doesn’t have that power. It has to be an act of Congress.”

When asked by host Jennifer Griffin what has changed since then, Richmond replied, “Well, Congress has acted.”

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The former congressman claimed the same legislation that allowed Biden and former President Donald Trump to delay student loan payments allows the president to zero out or reduce debt.

Biden himself also spoke about the limits of his power in this area. Last year, the president said he was prepared to cancel $10,000 in loans per person, but not $50,000, adding, “I don’t think I have the authority to do that by signing a pen.”

Biden justified the move by citing the HEROES Act of 2003. Passed in the wake of the September 11 terrorist attacks and at the height of the War on Terror, the law allows the Secretary of Education to waive or modify curricula financial aid for students in times of war or national emergency.

Representative Cedric Richmond, a Democrat from Louisiana, speaks during a press conference on Capitol Hill in Washington, DC, U.S., Wednesday, July 1, 2020. Congressional efforts to limit the types of military equipment that MoD May Transfer to Law Enforcement Departments are unlikely to touch an even larger source of advanced weapons available to civilian police. Photographer: Erin Scott/Bloomberg via Getty Images

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The law states that the authority applies to active duty military personnel, persons residing in an area affected by a national emergency, and those who have suffered “economic hardship” as a direct result of war, military operation or national emergency.

The Justice Department cites the ‘economic hardship’ clause in arguing that the education secretary can write off student loan debt en masse due to the lingering effects of the coronavirus pandemic.

On whether the decision will withstand legal challenges, Richmond said: “Yes, it will hold up in court.

Republican state attorneys general and conservative groups are currently assessing these challenges and looking for parties with standing to sue.

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This could prove difficult, although legal experts say loan services may be in the best position for a lawsuit as they will be directly affected by the document. Loan managers could argue that Biden went too far in issuing a blanket document, instead of tailoring the proposal to people with proven economic hardship.

Some federal courts, however, have in the past refused to allow government contractors to sue regulations that hurt their profit margin.

Fox News’ Haris Alic contributed to this report.

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