The Biden administration’s reckless, regressive, and unlawful student-loan cancellation effort is dead. Hurrah.

The Supreme Court just stopped his Department of Education’s attempt to sneak through a one-time pre-election gift to college-educated voters.

The pandemic emergency, the legal pretext for cancellation is now officially over.

And, to top it all off, a majority of Congress, including some Democrats, formally repudiated Biden’s actions in a resolution.

This should restore faith in our democratic institutions and illustrate the importance of the separation of powers.

One branch went too far, and the others intervened.

Nevertheless, now is the time to panic about student-loan forgiveness.

While everyone’s focus has been on the administration’s outrageous cancellation stunt, the DOE has been working tirelessly to accomplish an even more disastrous policy: a new Income-Driven Repayment rule.

The federal student-loan policy is obscenely complex, but under the Higher Education Act, Congress created a variety of programs to help borrowers who struggle to pay their loans.

Those include Income Contingent Repayment and Income-Based Repayment programs.

With varying terms, these programs limit borrowers’ monthly payments to a percentage of their income. IBR also includes a forgiveness provision after a borrower has made payments for 20 years.

The decision to enact these plans was Congress’ to make, so, regardless of whether it was a good idea, that ship has sailed.

The problem is that Congress gave away control over the terms of the various repayment plans.

The HEA delegated to the DOE the power to establish “criteria” for the various plans, including the “annual repayment amounts based on the income of the borrower,” and even the “period of time” a borrower must pay before their loans are forgiven.

And while Congress set out maximum repayment periods, it didn’t set minimums.

In January, the DOE’s boss proposed a new rule to radically alter existing plans and create a new catch-all IDR plan.

Under the new plan, in a variety of formulations, the secretary proposes to dramatically reduce the monthly payments of most borrowers, with millions looking at payments of $0, while also reducing the time to forgiveness to as short as 10 years.

In other words, while styled as a rule that simply tinkers with the details of existing income-based repayment programs, it effectively does the same work as the cancellation effort: It writes off the debts of millions of college-educated borrowers.

And it does so permanently — applying to future borrowers.

The cost of this effort, like the size of the universe, is impossible to fully grasp.

The rule itself claims it would cost taxpayers at least $138 billion. 

Other estimates are even more dire. 

The Penn Wharton Budget Model estimated that the actual program costs between $333 billion and $361 billion over 10 years. 

Estimates that account for tuition inflation and future borrowing costs put government expenditures as high as $1 trillion.

The old cancellation policy’s $500 billion price tag now almost seems quaint.

As one congressional staffer told me, given the choice he’d take cancellation over the IDR rule any day of the week: Cancellation was at least a one-time thing.

Yet, as horrible as the proposal is, the real outrage should be pointed at Congress.

Congress gave away the power to control student loans, and thus, in a roundabout fashion, the power to spend as much as a trillion dollars with a single rule.

Fortunately, the Constitution has something to say about this.

Article I, Section 1 forbids Congress from giving away its legislative power — “all legislative powers” belong exclusively to Congress, not federal agencies.

Article I’s Appropriations Clause requires federal expenditures to be “in consequence of appropriations made by law.”

The IDR rule is a consequence of a statute that violates both provisions.

Indeed, if the Education Department truly has the power to set any terms for repayment it sees fit, even if it means spending a trillion dollars of taxpayer money, then Congress has unlawfully given away its legislative power and allowed spending without proper appropriations.

As we celebrate the death of formal debt cancellation and a win for checks and balances, we need to get ready for an even more critical fight over IDR.

The rule remains a proposal, although I expect a final rule to come out any day.

Without judicial intervention, not only is the soundness of the entire student-loan system in jeopardy, but the very structure of the Constitution is, once again, under attack.

Caleb Kruckenberg is an attorney at Pacific Legal Foundation, a nonprofit legal organization that has defended Americans’ liberties when threatened by government overreach for the last 50 years.