DNC's Richmond insists Biden has authority to cancel student loans despite past Pelosi claim otherwise

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Biden adviser responds to student loan handout criticism: 'Everything doesn't benefit everybody'

DNC Advisor Cedric Richmond joined 'Fox News Sunday' to discuss Biden calling the MAGA philosophy 'semi-fascism' and criticism surrounding the president's student loan handouts.

President Biden's handout of $10,000 in student loans for many Americans will likely be met with legal challenges, but Democratic National Committee senior adviser Cedric Richmond insists that Biden will prevail.

In an appearance on "Fox News Sunday," Richmond defended the legality of the move, despite House Speaker Nancy Pelosi and even Biden himself appearing to take a different position in the past.

"People think the president of the United States has the power for debt forgiveness. He does not," Pelosi said last year. "He can postpone, he can delay, but he does not have that power. That has to be an act of Congress."

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

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The former congressman claimed that the same legislation that allowed Biden and former President Donald Trump to delay payment of student loans allows the president to zero out or reduce debts.

Biden himself also referred to 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 it by signing a pen."

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

Representative Cedric Richmond, a Democrat from Louisiana, speaks during a news conference on Capitol Hill in Washington, D.C., U.S., on Wednesday, July 1, 2020. Efforts by Congress to limit the types of military equipment the Defense Department can transfer to law enforcement departments is unlikely to touch an even bigger source of advanced weapons accessible to civilian police. Photographer: Erin Scott/Bloomberg via Getty Images

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The law stipulates that the authority applies to active duty military personnel, individuals residing in an area impacted 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 cancel student loan debt en masse because of the lingering effects of the coronavirus pandemic.

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As for whether the move will stand up to legal challenges, Richmond declared, "Yes, it will hold up in court.

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

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That could prove difficult, although legal experts say that loan services might have the best standing for a lawsuit since they will be directly impacted by the handout. Loan servicers could argue that Biden overreached by issuing a blanket handout, instead of tailoring the proposal to individuals with proven economic hardship. 

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

Fox News' Haris Alic contributed to this report.