OLC’s reading would be much more plausible if Congress had instead written that a waiver must ensure borrowers “are not placed in a worse position financially,” period. If that were the law, then the education secretary could treat loan forgiveness as simply a mathematical equation; if a borrower has lost $10,000 by virtue of living in a disaster area, the secretary could forgive $10,000 in debt to make it a financial wash.
But that is not what the HEROES Act says. It’s a fundamental tenet of statutory interpretation that all portions of the text should have some meaningful effect, so the qualifier “in relation to that financial assistance” must place some additional limit on the secretary’s discretion. And the historical context in which the HEROES Act was passed gives a clear indication of what this statutory text was understood to mean.
As the OLC memo acknowledges, the discussion of the HEROES Act in Congress consistently focused on giving the secretary the power to forbear loans and defer payments for service members, and the power to ensure that service members did not lose eligibility for any loan forgiveness programs that might otherwise require making consecutive minimum payments. In essence, Congress did not want those serving in the military and temporarily unable to make payments on their loans to leave the service and find that their principal balance had gone up (by accruing interest) or that they had lost eligibility for relief programs for which they were previously eligible. In both of these scenarios, service members would have found themselves not just in a worse financial position generally, but in a worse financial position specifically in relation to their loan status.
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