Law Assignment 1

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Legal, Ethical, and Social Implications of Federal Student Loan Forgiveness: Analyzing the Controversial Administrative Action

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Abstract

The study seeks to critically assess the 2023 debt forgiveness regulation established by the Department of Education, which recommended canceling up to $20,000 per borrower and was deemed illegally issued by the US Supreme Court. This study also examines the rule’s legality, ethical implications, and influence on community welfare. The study explores regulatory conflicts, legal standing for the Department of Education, and conflicting stakeholder interests. To determine if the policy is consistent with general social ideals, the ethical analysis must include legal positivism, utilitarianism, and deontology. Finally, the study proposes various methods to address the student debt situation while maintaining legality and equity.

Introduction

The 2023 regulation aimed to alleviate the growing student debt crisis by forgiving substantial federal loans for qualifying borrowers. The proposed policy directly impacted over 40 million borrowers, raising questions about economic mobility, taxpayer burdens, and the Department’s authority. In response to America’s ongoing student loan crisis, whether it was increasing federal loan limits or bailing out student loan debt, the Biden administration created a loan forgiveness regulation to erase up to $20,000 per borrower for eligible student loan debt holders (Culp, 2024). The policy was created as a US Department of Education policy and supported by executive authority to offer financial relief to millions of borrowers with student debt. Soon, the regulatory action proved to be a point of intense legal and political debate because some opponents said that the administration had exceeded its statutory authority. In June 2023, the US Supreme Court ruled the regulation improper because of a congressional lack of authorization under the major questions doctrine. The far-reaching implications of this decision were significant to millions of borrowers; it set a legal precedent concerning executive authority and the ethical and social responsibility of student debt relief. In this paper, I analyze the legal, ethical, and social consequences of this controversial regulatory action and the broader effect of executive rulemaking in financial policy.

Background

The US Department of Education (ED), established as a standalone agency in 1980, oversees federal education policy, funding, and civil rights enforcement. It administers federal student aid, enforces laws like Title IX, allocates funding for K-12 and higher education, and regulates institutions receiving federal assistance. While it influences national education policy, its authority is limited by Congress, the courts, and state governments, as education is primarily state-controlled. Recent issues include student loan forgiveness, Title IX expansions, and debates over school choice policies. Despite its power, the ED’s actions must align with federal law and constitutional limits.

As of February 2025, the US Department of Education is led by Secretary Linda McMahon, whom President Donald Trump appointed during his second term. The President nominates the Secretary of Education, who must be confirmed by the Senate, as outlined in 20 US Code § 3411 (Cornell Law School, 2021). This process involves the President selecting a candidate, followed by Senate hearings and a confirmation vote. Once confirmed, the Secretary oversees federal education policies and programs.

A single individual heads the US Department of Education (ED), and the Secretary of Education is a member of the President’s Cabinet. The President of the United States appoints the Secretary, which the US Senate must confirm. As of February 2025, the current US Secretary of Education is Miguel Cardona, appointed by President Joe Biden in 2021. The Secretary oversees education policy, federal student aid programs, and nationwide civil rights enforcement in schools and universities (US Department of Education, 2024). While the Secretary is the primary leader, the Department of Education also includes Deputy Secretaries, Assistant Secretaries, and advisory committees that help shape policies and implement education programs.

The policy, initiated through notice-and-comment rulemaking, intended to forgive $10,000-$20,000 per borrower based on income thresholds (Federal Register, 2024). According to Forbes News, the public comments on supportive comments included economic relief and public service incentives. For example, many borrowers expressed that loan forgiveness would provide significant financial relief, enabling them to invest in housing, start businesses, or save for retirement (Minsky, 2025). However, there are opposition concerns, such as fairness and economic impacts. Notably, critics voiced concerns that widespread loan forgiveness could contribute to inflation and increase the national debt, potentially leading to higher taxes or reduced public.

One of the scenarios is the case of Nancy Peter, a 71-year-old retired grandmother who has repaid her student loans for nearly 40 years. Despite her consistent payments, her debt has ballooned to approximately $108,000 due to accumulating interest. Nancy’s situation underscores the challenges faced by long-term borrowers, especially those on income-driven repayment plans where payments may not cover accruing interest. The Court’s ruling means that borrowers like Nancy, who might have benefited from the proposed debt relief, continue to grapple with substantial financial burdens.

The regulation aimed to cancel up to $20,000 per borrower, helping millions of Americans reduce or eliminate their student debt burden. Forgiving loans could have freed up funds for consumer spending, homeownership, and investment, boosting the economy. The plan disproportionately benefited low-income borrowers and communities of color, who are more likely to struggle with repayment. With many borrowers behind on payments, debt cancellation could have prevented defaults, protecting credit scores and financial stability. Despite far-reaching positive outcomes, there are notable “bad” outcomes, including revenues lost, investor reduction, and negative implications on US taxation and fiscal structure.

The proposed student loan forgiveness program by the US Department of Education was projected to have significant economic implications. Estimates of the program’s cost varied among analysts: the University of Pennsylvania’s Wharton School estimated that forgiving up to $10,000 per borrower would cost approximately $300 billion over 10 years.

II. Legal Section

Introduction to the Legal Section

The Department of Education Organization Act of 1979 (Pub. L. No. 96-88) consolidated all federal education programs. It granted the agency the authority to carry out all educational funding, policy, and regulation (Ribicoff, 2024). The result enables legislation that gives the Department the power of rulemaking and enforcement over federal education initiatives, including student loan programs. The Higher Education Act of 1965 (HEA) is one of the key statutes under which the Department works to authorize federal financial aid programs (University of Wyoming, 2024). The HEROES Act of 2003 authorizes the Department to amend or waive student loan provisions under a national crisis, constituting the basis for the loan forgiveness regulation (Kline, 2023). But lawyers challenged this and claimed that this authority did not go beyond broad loan cancellations, resulting in the Supreme Court ruling in 2023.

Rulemaking or Adjudication

Rules and adjudications are the primary means by which administrative agencies carry out enforcement. Still, there are just two different means that can carry out various functions in this process. It is a rulemaking process that usually involves making new regulations, a public notice and comment period, and finally, implementing the rule or rules, both of which create general policies or rules applied to a large group of individuals or entities. In contrast, adjudication puts the agency into a quasi-judicial role so that it resolves disputes by interpreting and applying the laws to cases, much like court decisions (Kline, 2023). However, adjudication calls for more excellent due process as it involves the specific rights of specific parties as articulated in the Administrative Procedure Act (APA) and includes hearings, presentation of evidence, and appeals, all for fairness and adherence to APA. Although it still requires transparency, rulemaking sets forward-looking policies instead of resolving individual disputes; hence, fewer procedural protections should apply since rulemaking involves fewer procedural protections.

Application to Loan Forgiveness Regulation

As opposed to being adjudicated, the rule regulating the loan forgiveness in question had been made through rulemaking. The conclusion that this was a policy of the Department of Education as a broad regulatory action and not an individual decision applied to millions of borrowers is correct. Under the Department’s interpretation of the HEROES Act, the Department could modify or waive repayment obligations at such an enormous scale (Kline, 2023). Adjudication promised—and adjudicated—the Palmer approach, making individual borrower disputes a case-by-case matter, but this regulation would establish a systemic policy change for all eligible borrowers. While such a broad action was within the Supreme Court’s power, it found that such would be something that would require explicit congressional authorization, therefore reaffirming the idea that significant policy decisions cannot be made without explicit congressionally granted authority.

Statement of Relevant Legal Principles and Rules of Law

1. Notice and Publication of the Rule

This is a plan that the US Department of Education announced on August 24, 2022, to forgive up to $20,000 in federal student loan debt for specific borrowers. On October 12, 2022, the Department published a notice of this policy in the Federal Register. It was an opportunity for the public to comment and to be given information about the proposed action. The notice is available at Federal Student Aid Programs (Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program). This was part of the Department’s rulemaking under “notice and comment, the requirements of the Administrative Procedure Act.

2. The legality of the Department of Education’s Rule

The US Supreme Court found the federal student loan forgiveness regulation proposed by the Department of Education (DOE) improper (Biden v. Nebraska, 2023). Therefore, it has no legal authority under its enabling legislation. The Court concluded that the DOE exerted its statutory authority under the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which was intended to assist in efforts to address problems due to national emergencies rather than broad loan cancellation. The ruling confirmed that agencies cannot take actions beyond the powers Congress authorized because such authorities violate the central doctrine, which presumes such action must arise out of or by the action of Congress. This nullified the program, but other legal challenges could have discouraged pursuing it before the Supreme Court ruled. Without addressing those two problems, the substantive due process claims made by loan servicing companies and equal protection concerns on behalf of borrowers who had already repaid their loans—allegedly providing fair credit to infrastructural development efforts in the housing market may have been enough to make the policy legally suspect.

3. Challenging Rules Under Due Process

Loan servicing companies and their investors who lost money due to the regulation could have also brought a possible challenge to the regulation on substantive due process. Student loan servicers, banks, and other entities that managed student loan repayments and collected interest lost a lot of revenue because the forgiveness of billions in student loan debt cut into their revenue stream. They had to shut down, lay off employees, or restructure their business model, directly contributing to the suffering of shareholders and the entire industry continuity. The tally here is that the regulation amounted to a ‘government “taking” of a legal business’ without compensation in violation of the Takings Clause’ of the Fifth Amendment. Takings Clause claims usually involve property, not business interests, so a strong argument could be posited that the rule unjustly interrupted contractual obligations among borrowers, lenders, and servicers. The rule was also legally challenged on substantive due process grounds in combination with this argument.

4. Equal Protection Challenge

In addition, the rule can be challenged under the Equal Protection Clause of the Fourteenth Amendment; unfair and unequal treatment of student borrowers is also an issue to raise another legal challenge. The rule only started to benefit those who had not repaid their loans, not those who had already paid theirs. The financiers of Stanford University were disbursing cash, one dollar at a time, out of the banking house of one of the wealthiest men on earth into the hands of people like those who vigorously repaid their loans after graduation and were effectively penalized for their acts of financial responsibility: they received no relief or compensation. As noted above, they were in the same broad category of student borrowers paying their debts. A tax credit or refund to those who had paid off their student loans before the policy was implemented would have been a potential remedy that would not have had these discriminatory financial consequences. However, if the borrowers were challenging equal protection in the law, courts would review whether the government had a legitimate and rational basis for treating different groups of borrowers differently.

5. Applicability to the Loan Forgiveness Regulation

If the student loan forgiveness regulation were argued to be procedural due process in violation, the rule would be subject to challenge because the Department of Education failed to give adequate notice and opportunity for public comment before the rule had been implemented. Nevertheless, the Department made available a notice in the Federal Register indicating that procedures have been met. Such a challenge would have to show that the regulation is arbitrary or the result of an irrational policy. The rest of the policy was meant to relieve the finances during a national crisis, making it difficult to prove it was arbitrary or unreasonable. Given these possibilities, the challenges under both Due Process aspects would be successful; however, only case by case, depending on the level of procedural compliance and the reasonableness of the state’s policy objectives.

6. Litigation and Appeals

However, the student loan forgiveness program was set to be the subject of the Supreme Court case Biden v. Nebraska. In that case, six states—Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina—filed suit against the Biden administration, challenging that the Department of Education went too far in acting to move forward with sweeping debt cancellation under the HEROES Act of 2003 (Kline, 2023). They sued because the plaintiffs argued that such broad cancellation necessitated explicit congressional authorization. The decision by the Supreme Court on June 30, 2023, in a 6-3 ruling, declared that the Department did not have the authority to proceed with the loan forgiveness program as it was proposed, killing the program in the process. The Court found that the Secretary of Education lacks the power to cancel approximately $430 billion in student loan debt under the HEROES Act and that the debt relief authorized by it required specific congressional authorization.

Legal Conclusion

In Biden v. the US Supreme Court, it was ultimately decided that the US Department of Education’s student loan forgiveness regulation was improper and unlawful. The Court found that the agency improperly exercised its authority under the HEROES Act of 2003 because the law did not confer the authority to cancel loans broadly, which the Court determined to be beyond the scope of the HEROES Act 2003 (Kline, 2023). Although the agency took the steps necessary to accomplish notice and comment rulemaking under the Administrative Procedure Act, the decision also reminds us that such important public and private policy decisions should be clearly and expressly authorized by Congress. Therefore, the rule was procedurally due process but was invalid because of the absence of the proper legal authority. Under the Court’s decision, executive agencies cannot be loose with sweeping economic policies without explicit legislative approval. Student loan forgiveness is also debated with ethical considerations like fairness, government responsibility, and equity.

III. Ethics Section

A. Introduction to the Ethical Section

Law and ethics are distinct and often joined in a single concept but are never identical. Law is a body of rules and regulations made by the authority with the power to enforce them and regulate the conduct of life within the organizations within a country to which those residing there are subject. Ethics is how following moral principles rules human behavior and fairness, justice, and the progression of the interests of society, even without legally demanded notions. According to a study, laws are supposed to be a means of order and protecting rights. Still, they may not coincide with ethical considerations because some legal actions are not accepted as morally right. For example, ethics usually demands that a higher degree of responsibility and integrity be shown. While the law has defined minimum standards of conduct, it does not impose a demand. Understanding such a distinction concerning moral implications in evaluating government actions and regulations is imperative.

Definition of Ethics

Ethics describes the principles of morality for an individual or some other group concerning moral actions and those that are right or not. Therefore, ethical principles tend to come from philosophical theories, religious beliefs, and societal norms; however, people try their best, by their means, to judge what is fair, just, and responsible. Ethics in public administration and public policymaking involves having decision-makers act in the promotion of the greater good, long-term effects, and interest of a variety of stakeholders. As opposed to the laws that dictate what people must do, ethics influence what they should do, which may involve actions beyond legal obligations. Ethical decision-making prevents trust, fairness, and credibility in governance while avoiding the situation or circumstances that might hinder the policy from being given to society.

Ethical Standards for Government Administrators on a Higher Level

Since their responsibility is to serve the public interest, not a private profit motive, business managers are held to a ‘higher ethical standard’ than government administrators. Whereas corporate executives focus on maximizing the excess returns to the shareholders, public administrators need to be fair, transparent, and accountable in their decision-making. Most of their actions can perpetuate the actions of millions of citizens, often with taxpayer funds, regulatory power, and powers to enforce laws that affect all of society. Government ethical mistakes may produce corruption, lost public trust, and systemic injustice that are more damaging than private business ones. Government officials must follow principles of integrity, impartiality, and public accountability because of their influence over policies that determine lives for democracy and the rule of law.

Legal Positivism and Its Perspective on Law and Ethics

According to legal positivism, law and ethics are separate things, and law has no legal existence unless it emanates from some established legal authority, whatever the moral reasoning. In this view, a law enacted adequately through the approved procedures by authentic processes is valid and must be followed irrespective of any ethical problems. According to legal positivists, law should be judged by its source rather than the attitude of moral correctness, and legal laws do not have to meet standards of higher ethical principles (Hovell, 2022). However, this approach is usually criticized for providing justification for unjust laws, saying that even immoral regulations are permissible if they have taken place through proper legal procedures. However, supporters of the bill say that separating law from morality will provide clarity and help avoid ethical and subjective judgments interfering with legal membership.

Ethical Evaluation of Loan Forgiveness Under Legal Positivism

From a legal positivist viewpoint, the student loan forgiveness regulation would be unethical since the Supreme Court found it legally improper; therefore it was not lawfully legitimate. Under legal positivism, the Court’s determination that the Department of Education had overstepped its statutory powers would also make the regulation invalid and, therefore, unethical. The policy itself, trying to offer financial relief to borrowers, notwithstanding legal positivists, would maintain that it does not justify flouting established limits in place. The study deals with whether a rule would be judged beyond the agency’s authority so that it would not meet the ethical standards of legal positivism even when there are moral arguments for giving debt relief.

B. Utilitarianism Ethical Theory

Explanation of Utilitarianism

It is an ethical theory that determines the morality of an action by depending on its consequences and goodness for the greatest good for the most significant number. Utilitarianism specifies ethical behavior based on how much happiness and suffering they create in society, and Jeremy Bentham and John Stuart Mill developed it (Juzaszek, 2023). A cost-benefit analysis is required in this approach, where the well-being of all affected individuals is considered to achieve the highest level of happiness in society. Ethics under utilitarianism is when an action benefits more people than it harms. There is, however, a significant criticism of this theory in that it may legally justify harm to a minority to increase overall utility, which puts into question justice and fairness.

Affected Groups and the Impact of Loan Forgiveness

1. Student Loan Borrowers (Positively Affected)

As it was meant to cancel up to $20,000 per borrower, the primary beneficiaries of the regulation were. As disposable income expands, borrowers would be able to spend more on housing, savings, and being able to move economically . Many low-income and minority borrowers would experience significant financial gains. This would decrease the mental health stress associated with student loan debt, which develops the overall well-being of the individuals facing such a burden. Canceling the loan would help lessen wealth inequality , particularly for stressed groups with trouble paying back the loan .

2. Taxpayers (Negatively Affected)

The debt would be forgiven, and the government would absorb that ; ultimately, that would be lost to taxpayers. Some may maintain that as those who never took out student loans or already repaid their debts, the policy is unfair. Others suggest taxpayer money should be the basis for more expansive social programs instead of targeted loan forgiveness. The policy could also add to the chronic national debt package, necessitating higher inflation or budget cuts elsewhere. Long-term economic consequences may be bestowed on future taxpayers, including those who never attended college.

3. Future Student Borrowers (Ambiguous Impact)

Future students might expect loan forgiveness (while increasing the likelihood of borrowing with ‘moral hazard’ (little or no responsibility). Universities might invite a rise in tuition fees because of the belief that students will get more loans, which should be canceled in the future. Such a policy would also have been able to affect reforms in higher education financing and would have been in the interest of future borrowers, provided it was structured correctly. There was no regulation preventing students from getting into debt, so future borrowers will still be plagued with the same problems. To some, forgiveness may have the appeal of an incentive to perform higher education and, thereby, long-term social benefits such as economic growth.

4. The US Economy (Mixed Impact)

With loan forgiveness, consumer spending will be available on goods and funds for housing and investments. Provided that it reduces racial and generational wealth gaps, it will do so to achieve long-term economic stability. However, the cost of forgiveness could further increase government deficits and, consequently, taxes or inflationary pressures. In the future, trust in government financial policies could also be influenced by trust in government. Still, public perceptions of fairness might affect public perception and trust in government financial policies. Such loan forgiveness could also lead to uncertainty in lending markets that detrimentally affect private lenders and federally sponsored student aid programs.

Utilitarian Assessment: Is the Rule Ethical?

Under utilitarianism, whether student loan forgiveness is ethical is determined by whether the benefits outweigh the harm overall. Borrowers (a large group) would receive huge benefits, but the taxpayers and the economic cost would also have to be kept in mind. A fully funded and structured policy to prevent future debt crises could have increased societal good to its greatest extent (Juzaszek, 2023). However, since there was no systemic reform, the long-term benefits did not necessarily outweigh the financial burden of others; therefore, the costs were shifted onto taxpayers. From a purely utilitarian viewpoint, this policy may not be ethically justified for borrowers but ethically justifiable for society because of a lack of long-term sustainability and fairness to the non-borrowers.

Final Ethical Conclusion Under Utilitarianism

Under utilitarianism, the loan forgiveness program is ethically debatable. Yes, it offers plenty of benefits to millions of borrowers, but at the same time, it places financial burdens on the taxpayers who stand to gain less directly. The policy’s short-term relief does not address systemic issues such that a future generation will face student debt issues again. It could have been more ethically sound if structured more effectively by offering funding mechanisms and education cost reform. Although its implementation contains economic tradeoffs that weaken its utilitarian justification, it is morally questionable on a broad, societal level.

Third Ethical Theory: Deontology and Its Application to Student Loan Forgiveness

Explanation of Deontology

An ethereal verity built by Immanuel Kant is deontology, which concerns itself with duty, moral rules, and principles instead of consequences. While utilitarianism supposes that an action is good or bad depending on its result, deontology says that some actions are simply right or wrong for themselves, in their property (Finefter-Rosenbluh & Wilkinson, 2023). This theory is founded on the concept of moral duty, fairness, and sticking to universal ethical principles. According to Kant’s categorical imperative, an action should be based on the rules that everyone can follow. In deontology, an action is ethical, provided it has been done according to moral duty and justice, even if the results do not favor all.

Applying Deontology to Student Loan Forgiveness

In deontological ethics, the government must treat individuals equally and ensure fairness and justice for its citizens. The ethical inconsistency related to the government forgiving student loan debt arises from forgiving debts for some individuals while excluding others, such as past borrowers who have repaid their loans or never attended college (Finefter-Rosenbluh & Wilkinson, 2023). This rule of unequal treatment contradicts the deontological principle of universal moral duty. However, if the government recognizes access to higher education as a fundamental right, it would be justifiable to extend assistance to struggling borrowers to fulfill its moral obligation to promote equal opportunities in education.

Personal Ethical Perspective

I believe there were good intentions behind student loan forgiveness, but addressing the issue this way was not ethical. It aimed at assisting students by alleviating some of the financial burdens they may be facing and helping them on their path to economic mobility. However, the implementation was not optimal, as it did not consider past circumstances fairly and equitably (Finefter-Rosenbluh & Wilkinson, 2023). Morally speaking, it is commendable to help struggling borrowers. While I believe a different approach would be more ethical, achieving this requires systemic reforms, such as lowering tuition or redesigning loan repayment systems to facilitate long-term solutions. One of the core responsibilities of ethics is to support those in need without being unjust to all members of society, and this policy fell short in that regard. Therefore, the rule was not entirely fair or ethical; it was more ethically debatable than fully justified.

IV. Community Welfare Section

Social Policy and Administrative Agencies

The government’s social policies aim to enhance citizens’ well-being, especially regarding education, health care, employment, and housing. These policies would be implemented through large groups of government employees working in administrative agencies who write and enforce rules that govern the conduct of industries and public services. Since the beginning of New Deal programs (Social Security Act of 1935), the Civil Rights Act of 1964, and the Affordable Care Act (2010), the US federal government has been promoting social policy. The program of student loan forgiveness, endorsed by the Department of Education, was designed not only to encourage interaction with higher education but also to benefit from a social policy aimed at relieving economic hardship by reducing the financial burden of student debts. The impacts of the policy on the student borrowers were meant to reduce the economic burden faced by the student borrowers primarily but to increase disposable income and thus support economic growth simultaneously indirectly.

Effectiveness of the Social Policy

This administrative rule is effective only if it mirrors student debt without getting caught in another financial imbalance. Debt relief would be hugely beneficial for borrowers who cannot afford repayment; however, that does not tackle the core of why tuition is so high, and debt is so hard to pay off. Furthermore, it would be unfair to those who have paid off their debts or gone down a different education path. The policy is also viewed as a “false flag” to get political support rather than a real long-term solution to make higher education more affordable. Job creation programs, tax credits, or education system reforms were perhaps better ways of doing this if the government’s true goal was economic stimulus.

Community Welfare Benefits

If the way it was implemented, it would have been good economically for struggling borrowers who would be able to spend their money on their housing, their savings accounts, and economic participation. However, it could be at the expense of long-term taxpayers who would end up paying the price. The higher education industry could also be encouraged to continue to jack up tuition in the hopes they can forecast future government bailouts. Overall, student loan systems could potentially create recurring financial crises without an effort to address structural issues that could give some economic stimulation through debt relief. In this way, some segments of the population benefit; however, the financial impact overall is uncertain.

Community Welfare Recommendations

The government should instead look at broad reforms that lead to a more fair and effective policy than one-off debt relief. Lowering tuition costs , expanding income-based repayment plans, and providing financial literacy programs that teach students what their options are before taking out any loan are a few ways this could be done. Another sustainable option would be more refinancing on student loans at lower interest rates. Furthermore, fair relief for borrowers in low-income or public service jobs is perhaps a better alternative to universal loan forgiveness. These measures would allow community welfare to improve over time and not cause resentment of taxpayers or economic distortions.

Community Welfare Conclusion

Yet, the student loan forgiveness program was meant to solve economic inequality and financial distress among student borrowers, but to implement and be fair, there are still debates around it. Despite short-term relief, it was uncertain if structural reforms would make it effective in the long term. The first would be targeted financial assistance, tuition cost reduction, and student loan system reform to prevent future debt crises. Since policymaking is ethical, immediate relief should be balanced with long-term solutions that will benefit all the stakeholders in good faith. Hence, although the idea behind the policy was commendable, a more comprehensive attitude is required to uplift the community welfare.

Conclusion

The federal student loan forgiveness regulation that the Department of Education proposed aimed to deliver financial relief to borrowers; the amount could reach $20,000 in student loan debt per borrower, but it was ruled improper by the US Supreme Court in 2023. The Supreme Court found that the Department of Education violated its due process and statutory limits in rulemaking power, although it was created by enabling legislation and has regulatory authority. The policy had both strengths and weaknesses ethically: on the one hand, you have a supporter of utilitarian principles, the alleviation of financial burdens for many—while on the other, the adherents of deontological ethics weigh in on the fairness and the unfair treatment of borrowers and taxpayers. From a community welfare perspective, the policy could have given short-run economic benefits but did not address the root causes of the increase in student debt and did not take a reasonable basis of fairness into account since the policy was applied selectively. In the future, structural reforms like tuition reduction, loan repayment flexibility, and financial education should form a more sustainable solution to provide fairness in the long term and promote the economy overall and explicitly economic stability. It is well known that this regulation has been the center of controversy due to the complicated balance between legal power, ethical obligations, and the suavity of society in realizing policymaking, therefore calling for transparent, equal, and efficient profit, something that is met to fight student loans.’

References

Cornell Law School. (2021). 20 US Code § 3411 - Establishment of Department; appointment of Secretary. LII / Legal Information Institute. https://www.law.cornell.edu/uscode/text/20/3411

Culp, H. (2024). Federal Student Loan Relief. https://www.nccertifiedparalegal.gov/media/730781/journal-29-1.pdf#page=16

Federal Register. (2024). Student Debt Relief for the William-D Ford Federal Direct Loan Program Direct Loans the Federal. Unblock.federalregister.gov. https://www.federalregister.gov/documents/2024/04/17/2024-07726/student-debt-relief-for-the-william-d-ford-federal-direct-loan-program-direct-loans-the-federal

Finefter-Rosenbluh, I., & Wilkinson, J. (2023). “It’s a financial decision”: students’ ethical understandings of non-government faith-based schooling in a neoliberal society. Educational Review, 1–20. https://doi.org/10.1080/00131911.2023.2254513

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Juzaszek, M. (2023). Durkheimian utilitarianism and legal moralism. Revus, 49. https://doi.org/10.4000/revus.8652

Kline, J. (2023, August 18). H.R.1412 - 108th Congress (2003-2004): Higher Education Relief Opportunities for Students Act of 2003. Www.congress.gov. https://www.congress.gov/bill/108th-congress/house-bill/1412

Minsky, A. S. (2025, January 28). Did Trump Just Suspend Student Loan Forgiveness And Federal Student Aid? Forbes. https://www.forbes.com/sites/adamminsky/2025/01/28/did-trump-just-suspend-student-loan-forgiveness-and-federal-student-aid/

Ribicoff, A. A. (2024, March 1). S.510 - 96th Congress (1979-1980): Department of Education Organization Act. Www.congress.gov. https://www.congress.gov/bill/96th-congress/senate-bill/510

US Department of Education. (2024). US department of education. Ed.gov. https://www.ed.gov/

University of Wyoming. (2024). Higher Education Act of 1965. UWYO State Authorization. https://www.uwyo.edu/stateauth/higher-ed-act.html