Campus Reform | 5 Big Questions for Rep. Ted Budd

5 Big Questions for Rep. Ted Budd

Rep. Budd sent a letter to Education Secretary Miguel Cardona advising him against mass cancellation of student debt.

Rep. Budd says that circumventing Congress to cancel student debt would be unconstitutional.

Congressman Ted Budd (R-NC) led a group of GOP lawmakers in telling Education Secretary Miguel Cardona that "the Department [of Education] does not have the legal authority to cancel student loan debt en masse."

Budd's letter, sent last month, was co-signed by Reps. Warren Davidson, Scott Perry, and Barry Loudermilk.

Budd tells Campus Reform that mass loan cancellation without the consent of Congress would be "blatantly unconstitutional." He cites Article I Section IX of the Constitution, which says in part, "No money shall be drawn from the Treasury, but in consequence of appropriations made by law."

The North Carolina Congressman says he anticipated the Department may attempt unilateral loan forgiveness because Toby Merrill has been appointed the Department's Deputy General Counsel. 

Merrill, former head of the Project on Predatory Student Lending, has argued that the Department could cancel student loans without Congressional approval. Budd said, expressing his concern over the appointment, "Personnel is policy."

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Prior to leaving office, the Trump administration issued a memo January 12, 2021, stating, "we believe the Secretary does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances...whether due to the COVID-19 pandemic or for any other reason." 

Budd states that the Biden administration is likely to disregard the memo entirely. 

“The Trump administration felt the duty to follow the law, and the Biden administration just doesn’t feel that same compulsion," he says. 

Regardless of how it might be enacted, Budd tells Campus Reform that mass loan forgiveness would lead to an overall increase in the cost of college. “We see the same thing happening with government intervention in healthcare; we’ve seen it with housing bubbles, with government intervention in housing," he said. 

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Budd opposes loan forgiveness because, in his view, it sets up poor incentives and unfairly harms people who did not go to college or paid for college. 

"I really think it’s just a wealth transfer further to the upper class and the elite and not out there to the hardworking taxpaying individual, so it’s very, very concerning for those who have done it the right way. They’ve paid their student loans...or they saved up beforehand, or parents and grandparents helped them through college," Budd says.

He continues, "It’s demotivating to them and it’s motivating to those who want government to do more and more for the individual.”

Education, Budd says, should be viewed in context over a person's lifetime: “I think we need to realize that education is a lifetime pursuit; it’s not a four-year pursuit," he says. 

Budd also praises trade schools and community colleges as options for students who want to gain work skills without racking up excessive student debt.

Editor's Note: Morabito worked at the Department of Education at the time the January 12, 2021 memo was sent.

Follow the interviewer on Twitter: @AngelaLMorabito