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Could Elizabeth Warren really wipe out $1 trillion in student loans in a single stroke?

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If she is elected president, Elizabeth Warren has vowed to start wiping out hundreds of billions of dollars in student loans with the stroke of a pen on her first day in office, citing a 1965 federal law the Massachusetts senator says would let her proceed without congressional approval. 

Don't stop making those student loan payments just yet. Warren's plan, released just before Tuesday night's Demorcratic primary debate, hinges on a purported legal loophole that some legal and college-lending experts say may not even exist. That could allow opponents of student-debt forgiveness to scuttle any efforts to offer relief on such a massive scale. 

Student loan loophole?

The U.S. government, just like any lender, has the authority to forgive a debt. But the power to do that almost always rests with Congress — not the president. Student loans appear to be an exception.

Back in 1965, in an effort to expand college access, Congress passed the Higher Education Act, which gives the Department of Education broad powers to run a college student loan program, including the ability to "enforce, pay, compromise, waive, or release any right, claim, lien, or demand" under the lending program. 

And that's the loophole that Warren is banking on. She believes that part of the act would allow her administration to wipe much or all of federally backed student debt. 

Three lawyers with Harvard's Project on Predatory Student Lending have written a letter concluding that Warren's unilateral debt relief proposal is "lawful and permissible" under current law — no congressional stamp of approval needed. One of the authors, Deanne Loonin, is a noted legal expert on student lending. 

But here's where that loophole starts to shrink. Even Loonin and her co-authors agree that the U.S. president alone cannot directly forgive student debt. The Higher Education Act grants that power to the Secretary of Education. So, for Warren to waive student loans on her first day in office, her Education Secretary would have to be on the job also to execute the plan. 

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If the Senate is still controlled by Republicans, the issue of loan forgiveness could become a sticking point in any process to confirm an Education Department chief. That means Warren might still need congressional approval to enact student loan reform in order to get a Secretary confirmed, if not to pass a relief bill.

Eileen Connor, one of Loonin's co-authors, and director of litigation at the Predatory Student Lending Project, believes an acting Education Secretary would also legally be able to forgive debt. But that would certainly open the door to a legal challenge, most likely from companies like Navient and Nelnet that make millions servicing the nation's roughly $1.5 trillion in public student loans and that would see that lucrative business disappear along with the debt.

Mark Kantrowitz, publisher of, said Warren's debt plan would hit legal resistance whether it was enacted by an acting Education Secretary or a confirmed one. Kantrowitz said the Higher Education Act does give the Secretary of Education considerable flexibility, but only for the purposes of running the government's student lending program — not for shutting it down, as would happen under Warren's mass loan forgiveness plan. 

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Kantrowitz also points out that much smaller student debt relief programs require congressional approval, so it's not clear why Warren's plan, which would erase as much as $1 trillion in debt, wouldn't require such a process. 

"Congress didn't mean to abrogate its responsibility and allow the Secretary of Education to spend $1 trillion," Kantrowitz said. "I don't think Warren's plan would even pass the legal counsel of the Department of Education, let alone a court challenge."

Still, Harvard's Connor said the most important part of Warren's proposal to begin forgiving debt on day one of her presidency is that it has pushed the conversation forward. "Political pressure could stop the plan short of actually happening," Connor said. "But the conversation that was happening was 'could it be done' instead of 'should it.'"

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