(Slip Opinion) Use of the HEROES Act of 2003 to Cancel the Principal Amounts of Student Loans The Higher Education Relief Opportunities for Students Act of 2003, Pub. L. No. 108-76, 117 Stat. 904, grants the Secretary of Education authority to reduce or eliminate the obligation to repay the principal balance of federal student loan debt, including on a class-wide basis in response to the COVID-19 pandemic, provided all other require- ments of the statute are satisfied. August 23, 2022 MEMORANDUM OPINION FOR THE GENERAL COUNSEL DEPARTMENT OF EDUCATION The Higher Education Relief Opportunities for Students Act of 2003, Pub. L. No. 108-76, 117 Stat. 904 (2003) (codified at 20 U.S.C. §§ 1098aa–1098ee) (“HEROES Act of 2003,” or “HEROES Act”), vests the Secretary of Education (“Secretary”) with expansive authority to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies. The Act provides that the Secretary may “waive or modify any statutory or regulatory provision applicable to” federal student loan programs if the Secretary “deems” such actions “necessary to ensure that” certain statutory objectives are achieved. 20 U.S.C. § 1098bb(a)(1)–(2). One of those objectives is to ensure that “recipients of student financial assistance . . . are not placed in a worse position financially in relation to that financial assistance because of” a national emergency. Id. § 1098bb(a)(2)(A). In 2020, the Secretary in- voked this authority in response to the COVID -19 pandemic to suspend the repayment obligation and to waive interest payments on student loans for every borrower in the United States with a loan held by the federal government. See Federal Student Aid Programs, 85 Fed. Reg. 79,856, 79,862 (Dec. 11, 2020). Prior Secretaries have exercised the same authori- ty to categorically waive statutory and regulatory obligations for borrow- ers residing or working in a disaster area in connection with a national emergency and for borrowers who suffered economic hardship as a result of a national emergency. See, e.g., Federal Student Aid Programs, 77 Fed. Reg. 59,311, 59,314 (Sept. 27, 2012); Federal Student Aid Programs, 68 Fed. Reg. 69,312, 69,313–14 (Dec. 12, 2003). 1 46 Op. O.L.C. __ (Aug. 24, 2022) You have asked whether the HEROES Act authorizes the Secretary to address the financial hardship arising out of the COVID -19 pandemic by reducing or canceling the principal balances of student loans for a broad class of borrowers. We conclude that the Act grants that authority. The plain text of the HEROES Act authorizes the Secretary to “waive or modify any statutory or regulatory provision applicable to” the federal student loan program, 20 U.S.C. § 1098bb(a)(1) (emphasis added), an authority that encompasses provisions applicable to the repayment of the principal balances of loans, provided certain conditions are met. We conclude that targeting relief towards those individuals who suffered financial hardship because of COVID -19 and who otherwise satisfy the requirements of the Act accords with the Act’s requirement that the waiver or modification “be necessary to ensure that” student loan recipi- …
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