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Mr.
Gordon W. Watts
821 Alicia Rd
Lakeland, FL 33801-2113
Dear Mr. Watts:
Thank you for your recent
correspondence. I always appreciate hearing from you and
having the benefit of your views.
I'm sorry you
weren't able to get your question in on the Tele-Town Hall
Meeting about allowing individuals who have outstanding student
loan debt to declare bankruptcy. You no doubt
recall that, as I have noted before, and as I am
a supporter of our nation's future leaders, I believe very
strongly that students should be able to obtain financial
assistance to pursue a valuable education that will result in
reliable employment. In that same vein, I was proud to join
my congressional colleagues to pass legislative measures like
H.R. 1911, the Bipartisan Student Loan Certainty Act, which was
signed into law in August of 2013. This legislation has
lent permanent stability to the student loan financing market
going forward by capping interest rates on Stafford and PLUS
loans based on market rates.
To your question about
contract law and student loans, I would say that, generally
speaking, when prospective student borrowers have signed
contracts for loans from the government, often there are clauses
that stipulate the government is free to change certain parts of
the contract. Or, alternatively as you have mentioned, it is
often unclear that terms not contained in a contract, with
the government or not, should ever be enforced. The latter
question alone causes great division among contracts scholars.
Additionally, where it is a given that private banks signed
private loan contracts with students, and the President later
unilaterally placed a cap on the amount these students can pay,
then it is safe to say that the President is certainly
interfering with the freedom of contract, and by extension,
economic freedom.
To your final question, I would like to
remark on your point combining the President's
"pardon" powers under Article II of the
Constitution. The President may pardon criminal
offenders, and he may also issue executive orders; the two
powers derive from the vesting of the "executive
power" in the President in Article II, but they are not
identical.
As always, thank you for contacting me
with your concerns, and please feel free to continue to write,
call, and email my office.
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