OA625: Student Loan Forgiveness!

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:01:17 Thomas: Hello and welcome to Opening Arguments. This is episode 625. What a nice number. That's a good number. I'm Thomas. That is P. Andrew Torres, proud father and lawyer extraordinaire. How you doing, Andrew?

0:01:30 Andrew: I, you know, this is the first episode in which I'm going to say not fantastic, and that is that yesterday was the day in which my son decided that was the, you know, kind of final goodbye. I'm still here in Rochester, New York for another, another day. I mean, pretty, pretty much to do this show.

0:01:37 Thomas: Live

0:01:55 Andrew: I didn't want to travel on a Thursday, uh, yeah, there we go, yeah, yeah, yes, fortunately, as this goes out, uh, I will have long since been at the airport, but the Staybridge Suites, come, come to downtown Rochester, I will not be here anymore, um, no, you know, only son going away to college, and yesterday, yesterday, uh, he said, "Okay, well, this is goodbye, goodbye" and

0:01:54 Thomas: Show in your hotel room for Rochester OA listeners.

0:02:24 Thomas: Geez,

0:02:25 Andrew: And yeah, I, I, uh, I did not cry at that time, no comment, now, you know, he's already, uh, texted me with, know, uh, the friends he's met at some of the opening, you, uh, know, Convocation stuff, and, and I'm, I just couldn't be more proud, but fast forward you got about a decade, my friend, and all

0:02:25 Thomas: Alex. Alex. Oh, awesome. Congratulations to both of you. That's a, I you know, in a way, sort, uh, of similar milestones, Alex going to college, Phoeby starting school officially kindergarten officially what, uh, what cool milestones, but enough of that, enough about that, let's talk about my dog no

0:02:52 Andrew: Right okay oh yeah, that's right, are, you have a delightful, delightful, beautiful little golden doodle puppy, are, are you going to share her name on the air?

0:03:07 Thomas: Daisy Crunchwrap Smith, I, if she were my dog, it would have been Crunchwrapped Daisy Smith, of course, Crunchwap was, was my name for the dog, but it's Lydia's dog, Lydia is the dog person, uh, and she deserves nice things you say that, I, I, no offense to anyone in the world listening, or you, I, this is confirmed that I'm a cat person, that's been my experience, now having a puppy, it's not a, a super tiny puppy. It's, it's a 13 week old puppy. So not, you know, not as bad, but that's not easy. And it's, I, yeah, I was just thinking I need a dog that like, just sits, you and just like, doesn't do anything. Doesn't bother me. Craps in a box, you So I need to cat. I need,

0:03:09 Andrew: Or you'll be a dog person soon enough, so no yeah

0:03:48 Thomas: I just, I need cat is whatever.

0:03:49 Andrew: I was gonna I was going to say I

0:03:50 Thomas: As I start to paint ain't the picture of my perfect dog, I realize it's a cat.

0:03:51 Andrew: I have the perfect dog for you, uh, it does none of those things, um,

0:03:58 Thomas: No, but as far as dogs go, Daisy Crunchwrap Supreme Smith is like a very, very good dog. Like she is, she is a challenge because she's a puppy, but like, not like a horrible puppy. She's just, you know, she's got energy. She needs stuff to do.

0:04:13 Andrew: And in fine P. Andrew Torres fashion, she will make D Crunchwrap Smith, I think, a fantastic lawyer name so there you go, love yeah, news big enough that this, uh, is almost certainly going to be a Trump-free week. Not that there have not been significant developments in connection with the search at Mar-a-Lago and Donald Trump's hilariously incompetent response. And all of that, I am dying to tell you about it. We have to do it next week because, you know, this president announced a massive overhaul to student loan debt, and and we need to get through that this week. I also, I wanted to mention briefly, Thomas, I'm sure you, like most of our listeners, were following

0:04:13 Thomas: Oh yes. The PAW offices of D Crunchwrap Smith. We enough about anything, but the news that we need to talk about, um, major news.

0:05:04 Thomas: Cleaning up pee

0:05:04 Andrew: The There was a special election in New York's 19th congressional district. This is a swing congressional district that Donald Trump carried in 2016. Joe Biden carried very, very narrowly in 2020. And everybody expected the Republican to win because, you know, midterm election Democrats about to get killed in the House. And in fact, Democrat Pat Ryan won that district by two and a half points. Again, it is not a Republican district, right? It's a

0:05:04 Thomas: Constantly?

0:05:25 Thomas: Yeah.

0:05:36 Thomas: Swing district, essentially.

0:05:38 Andrew: It is a swing district D plus one and a half to Biden in 2020. in

0:05:43 Thomas: But that's exactly the kind of district it's expected that we will lose in 2020, right? Right. So very good news, right,

0:05:48 Andrew: Yeah, that is exactly right, the 538 forecast that say 80 percent chance the Republicans win the House, the Democrats maintain the House is by winning these kinds of districts. So right. Sign. And also the interviews with Pat Ryan suggest, again, you don't want to make too much out of this. But when Ryan was interviewed, he pointed to an NBC poll, right, dated August 21st, in which folks were asked to list right after they said, you know, right track, wrong track. Do you support Biden? Do you oppose Biden? And all those numbers were consistent. Biden underwater, 42 percent approval rating, 25 percent of the country saying that it's on the right track and, you know, 74 saying wrong track.

0:06:35 Thomas: Yikes.

0:06:36 Andrew: You know, right. All the yikes numbers that are consistent with the dismal painting of of Joe Biden politically when asked to name the number one threat right now, right? The most important issue, thing that folks volunteered was threats to democracy at number one, 21%. Now, that's what I would say. I think that's what our listeners would say, it's impressive that that is, you know, not inflation, not healthcare, not you know that That that's that's number one on the list.

0:07:11 Thomas: That's everybody. It's including Republicans? Wow.

0:07:14 Andrew: Yeah. Yeah that is A general electorate survey. No likely voters. Green. You know, as I point out, the other results are similar to other polls. Right. So you know, if this were one of these that had Biden's approval rating at 64 percent, you'd be like, all right, well, that's not. Yeah and and here's what Pat Ryan said which I which I think is right. He said, he saw that poll, said to himself, this is exactly what I'm feeling on the ground. There's a strange assumption underlying much punditry that, you know, inflation and gas prices are more real and authentic for voters than other issues.

But the radicalization of Republicans is also a factor. Gun violence, voting rights, reproductive rights, quote, there's this sort of power grab of the far, far, far right. It's just wildly out of step with where the vast majority of Americans are, end of quote. We all know that and feel that strongly here every day on OA. And I just want to tell you that this poll, this election result, this candidate, that shows, I think, that we're making a difference. So keep being out there. Don't be afraid to talk to Uncle Frank a a little bit. Don't be afraid to brought your, your, base of folks with whom you're communicating.

Uh, we all need to do everything we can to make sure that, you know, this midterm election bucks historical trends. Uh. And we're going to be talking about that in the main segment. So a, uh—I thought that that was encouraging to know know that the things that you and I feel as junkies kind of watching this, like how could that not penetrate to the American electorate, feels like maybe it is.

0:07:15 Thomas: OK, huh? Yeah, yeah, yeah. Yeah.

0:08:49 Thomas: Yeah, I mean, when they're it's a combination of I bet the hearings did a decent job, but also a combination of them striking down Roe and passing incredibly unpopular, you know, zero exception anti-abortion legislation like people just, as you say, the average people who don't maybe weren't as tuned in, I don't think maybe knew how bad it would get under Republican rule. Like, I just don't think they really there. We do a good job of gaslighting everybody to there's all these think pieces about how I won't be so bad. Oh, they've had enough. They won't really they didn't really want to do this because it's unpopular. It's like, no, they wanted to do this. And they're still doing more they're every like day. And I think that's going to make it have a huge impact. I think it it drives the overall message. Horrible abortion restrictions drives the overall message of an extremist minority, you know, and I think that reinforces the insurrection anti-democracy stuff.

0:09:43 Andrew: I think that's exactly right. And again, we had that unbelievably encouraging result in Kansas. And are individual data points, right? It's hard to construct an overarching narrative, but But, you know, you'd rather have these good points than not.

0:10:00 Thomas: Yeah. So good news, everyone. And now some more good news. I think in our main segment, let's talk about student loans.

0:10:02 Andrew: Yeah,

0:10:08 Clip: Is it fair to people who in fact do not own multi-billion dollar businesses to see why these guys give them all the taxes? Is that fair? What do you think?

0:10:25 Andrew: I wanted to give a little bit of a background on this issue first. College, you post-secondary education, has transformed a lot in this country in multiple time periods. It meant one thing in the 19th century. But beginning in 1965, beginning in the Johnson administration, the and this was the passage of the Higher Education Act, the ideal was to really do two things. That was, number one, prepare the United States for a post-industrial economy that required high levels of training and academic experience, and number two, to narrow the gap, particularly the race gap.

0:11:13 Andrew: And so those were the explicit purposes of the Higher Education Act. That act college tuition grants, guaranteed certain low-income, low-interest student loans, and also made available work-study funds. Right? The net effect of the Higher Education Act was to triple college enrollment in the United States, right? That is to go from a largely non-college attending country to a largely majority college attending country, right. That act also created what we today call Pell Grants, which were originally called Basic Educational Opportunity Grants. They are codified today, Today, 20 U.S.C. section 1090. Now, it's been a long time since 1965.

0:12:01 Andrew: And Pell Grants, the Higher Education Act in general, has been a political football, right? It's been moved up and down both sides of the field, been subjected to various political compromises over the years. And a lot lot of these have been short-sighted and stupid. So for example, a regulation that said, you know, well, convicted felons are ineligible to get Pell Grants.

0:12:28 Thomas: Here comes the means testing. We got to stop anyone who we possibly don't like from maybe having an opportunity to improve their lives and become better people.

0:12:30 Andrew: Yeah. Yeah, and if I wanted to be as misleading as possible about that, I would tell you that was a provision that was added into the law by Bill Clinton and deleted from the law by Donald Trump. And I would be correct on both of those counts.

0:12:46 Thomas: Right. Technically correct.

0:12:53 Andrew: Yeah, the worst kind here, because it was added into the 1994 budget amendments by Republicans in Congress as part of an overall compromise on the budget package when Bill Clinton was about to get his, and the Democrats were about to, their clocks cleaned in the 1994 midterm election. And so, yeah, it was put in as a way of saying, all right, you know, Republicans are demanding this. We'll make felons ineligible for Pell Grants, which, as you point out, this is exactly the kind, if you're thinking about long-term social policy, people who are felons who get out of prison are precisely the kind of people you want to go to college, right?

0:12:53 Thomas: The not best kind of correct.

0:13:36 Thomas: You would

0:13:37 Andrew: The idea that you would want to attach a moral stigma to, hey, maybe reintegrating folks into society and giving them better educational opportunities so that they can have better employment opportunities so that they don't go back to a life of crime is a good idea, you know, you're clearly not a Republican. So did it get repealed? It got repealed in kind of exactly the same way. We discussed on episode 450, which doesn't seem like it was 200 episodes ago, this was the December 20th Consolidated Appropriations Act of 2021. Remember, they were racing to get one last piece of coronavirus relief passed in

0:13:37 Thomas: Think.

0:14:22 Thomas: Yeah.

0:14:23 Andrew: 2020 during the lame duck session. And the top line – and Donald Trump was busy meeting with Rudy Giuliani and, as we found out today, Terpsichore to come up with plans to overturn the election.

0:14:37 Thomas: Wait, we found out that Trump was meeting with Terpsichore like in person?

0:14:43 Andrew: Found out that she was in the war room. That's – now, we find that out through an unbelievably unreliable source.

0:14:47 Thomas: No way. Really? Oh, okay.

0:14:53 Andrew: Turn in, you're going to have to tune in on Tuesday to find out more of that. So that's a little hint to drop for next episode. So Trump had checked out what Republicans cared was that the checks were only going to be 600 bucks, And right? Once the Democrats caved on that, the Republicans didn't care. And so Democrats wrote all of the boring provisions provisions in this, you know, multiple thousand page bill. And most of those turned out to be really, really good. And So there it is on page 2005 of the Consolidated Appropriations Act, the section 483D3, Federal Pell Grant Eligibility, which says, "In order for a confined or incarcerated individual who otherwise meets the eligibility requirements of this title to be eligible to to receive a federal Pell Grant under this section, the individual shall be enrolled or accepted for enrollment in a prison education program." And this, right? Is not just like a one line that was slipped into there by accident. There are data collection requirements on recidivism and so forth. So that was another good thing that, you know, we managed to get done. We managed to kind of reopen,

0:14:54 Thomas: Spider. Did Spider tell us? Oh. Okay. I will, yeah.

0:15:11 Thomas: All right.

0:15:24 Thomas: Snuck it in there,

0:16:05 Andrew: Yeah, Pell Grants.

0:16:05 Thomas: Relied on their, the fact that they don't actually give a shit about policy, really, and aren't uh sticklers for the details, got it in their, in the the 2000s, in terms of pages.

0:16:13 Andrew: Yep. Yep, Yep. Back to the 1965 Act, we talked about sort of its broad purposes in terms of transforming the economy, narrowing the racial divide. In the 1970s and 1980s, Republicans were sort of neutral on that first prong, strongly opposed to the second prong. Would Right. Argue today they're also strongly opposed to the first prong insofar as it contradicts with their religious agenda. But we'll talk about that in a minute. And So in the 80s, once they resumed power, that the Reagan Republicans did two things. And this was not just with respect to education. This was with respect respect to all government programs. A, they cut the top line reimbursement of the federal government to everywhere, right?

We talked about, for example, the slashing student lunch programs and, you know, the classification of ketchup as a vegetable, which, you know. Never went through, but was emblematic of, you know, what the administration wanted to do. And we all know that. But there's a second kind of structural thing that the Reagan 80s did. And that was the idea of, this is a multi-phase process, it was the ideia of replacing federal responsibilities with state responsibilities. And so the pitch in the 1980s was, look, if there's this federal program that we spend that benefits people at the state level, and it costs us $100 million to run the program, program. Let's just cancel that program and give $100 million to the states and let them run

0:17:10 Thomas: Yeah. God, and let

0:17:57 Andrew: The program.

0:17:57 Thomas: Them not do it.

0:17:58 Andrew: Right. And that's right. And so the immediate benefit to Republicans was all of a sudden there was a massive cash infusion to red states. The Republicans also opposed oversight and requiring the states to really do anything. So, you you basically wrecked about half half of what the government was doing. There was a more pernicious aspect of that as well, which was now after you manage to devolve something to the states under the idea of, hey, look, not cutting we're programs. This is going to be revenue neutral.

0:18:28 Andrew: We're just going to take the $100 million that we're spending directly on kids, and now we're just gonna have a $100-million line item to the various states. Well, then in the next Congress, Right. Or as soon as there's the slightest economic downturn, you're like, I don't understand why we're writing a check for 100 million dollars to the states. Let's just cut that number. And that is, in fact, what happened. Tons Right? Of formerly federal programs were devolved to the States with promises of block grants and other things that were pushed by. And again, I think some of these people were just duped, right? Like Jack Kemp, who later became Bob Dole's running mate in 1996, congressman from New York. Think really intended for there to be some kind of economic competition at the state level and was just naive about it, right.

0:18:27 Thomas: Yeah, yeah, yeah,

0:19:16 Andrew: Right. Didn't realize that he was being used by people who wanted the government and still want the government to this day to do nothing, and realize he was just step A in a two step process. So OK, that, that's what happened. Republicans, right, devolve stuff to the states and then later would cut those line items to the States. That, by the way, you might recall from here, because this is right about when you were a Republican in high school. It used to be Republicans were super excited about lobbying for what they called the line item veto, if you remember that kind of briefly being a political issue.

That's why. Yeah, they don't care anymore because the damage has already been done. But what they wanted to do, so they were not shy about it at the time, right, what they wanted to doing at the the time was replace all of the federally funded safety net with block grants to state that showed up as individual line items, and then give the president the power to, in individual bills, cross out line items and still sign the bill into law. So that, that wasn't super subtle, that died out and is no longer a key function

0:19:50 Thomas: Vaguely. Is

0:20:23 Andrew: Of what.

0:20:23 Thomas: That Would that be unconstitutional? It feels like a separation of powers issue.

0:20:25 Andrew: Yeah, it it it felt that way to me as well at the time, and it was never passed as legislation to sort of put it to the test. So But but lots of people argued. Right. Counter argument, I don't know how this would play with today's originalists, is that lots of state governors have line item vetoes. Now again, states have way less revenue than the federal government, and so, you different enacting language and, uh, states are have differing kinds of sovereignty than the general government, so, uh, we could do an an episode on this, but, you know, it's sort of a defunct issue at this point. But that's why it's a defunked issue. Wanted it back then. And, you know, now it's not a tool they need because the legislature is already broken. Now think about the implication of that in the 1990s. States are under way more budget pressure.

0:20:36 Thomas: Okay. Yeah.

0:21:17 Thomas: Would just like to set the record straight. I was not in high school in the 90s, Andrew. I think you overestimate how old I am. I was exclusively a Republican in the 9-11 Bush era in high School. But yes. Okay.

0:21:27 Andrew: Okay. Got. It all.

0:21:28 Thomas: Totally different. So this wasn't then. This was in the 90s. Okay.

0:21:28 Andrew: Right, yeah. Okay, well, that helps me pin down when this disappeared as an issue. I recall it being an issue in the 90s and then, uh, I wasn't sure how well that lasted into the 2000s. If Thomas Smith is any indication, it did not. So there we go. On? So now you have have more highs and more lows, more risk devolved to the states. And think about the pressure that that puts those states under whenever there is an economic downturn. And that is, OK, we don't want to, but even when you have good institutions and good faith governors, you still had hard hard choices, and right? So state subsidies to their public schools largely dipped over this period. Again, there are holdouts. There are exceptions.

0:22:17 Andrew: California and Massachusetts come to mind, But right. There are lots of, you purple states that have outstanding public schools, University right. Of Virginia, University of North Carolina. These are really, really good good school systems, and they've been subject to a political football? And having the state budgets cut. So you put all of that together, you have four decades of educational costs going up, right, both public and private. You have decreasing federal grants, that then leaves a pretty huge gap or a massive disincentive to attend school in the first place, both of which Republicans explicitly want, That exacerbates the gap that the 1965 Act is meant to fill and, By the way, has paved the way for scam private schools and cargo cult phony institutions that bill themselves as universities, like Liberty quote University, um, and and Democrats have just been too slow, uh, too late, or or too detached to to stake out the opposite position.

It's really disappointing, right? Like, our party should be out there saying no for-profit Universities Universities are not a part of this bill. You're not a real university. Don't fall for that. And I'm sure there are a handful of people saying that. No, sorry, you don't get this if you're Liberty University. But and large, we don't. So let's look at today, right? 40 years of the Republican program in action.

0:23:54 Andrew: And here's what we have. Number One, the average cost of college has tripled over the past 40 years. That's ridiculous. Ridiculous.

0:24:00 Thomas: Tripled. Well, I assume wages have tripled in that time though too. So it cancels out, right?

0:24:04 Andrew: Yeah, yeah. I'll look, I'll look that

0:24:07 Thomas: Yeah.

0:24:07 Andrew: Up.

0:24:07 Thomas: Let's just look that up real quick.

0:24:08 Andrew: Yeah. Number two, that means 70% of students have to borrow money in order to go to school.

0:24:16 Thomas: 70%. What?

0:24:16 Andrew: Yep. And they have to borrow lots more money than they used to. So right, specifically, right, when we're talking about low-income folks, Pell Grants used to cover 80% of the cost of going to a a four-year college, right? Yep.

0:24:31 Thomas: Because I was going to mention I got the Pell Grant and it was a like meaningless amount of my tuition. I mean, it was nice to get like, I don't know, a couple thousand dollars that was, I can't remember if it was just, was that free money or was that the unsub like the um interest-free loan? I don't remember either

0:24:48 Andrew: It there are a variety over the years, so yep

0:24:50 Thomas: Way I was happy about it, I remember it was like, oh good, that that money is cheaper or whatever, but it was minuscule. 80

0:24:57 Andrew: Used to cover 80 of the costs of college, right? That was the the Lyndon Johnson vision, right? Everybody should go to college if you can pay for it, great, if you can't, we'll help you get there. Right.

0:25:09 Thomas: Boy my, my life would have been so much easier financially when I first graduated, like that would have been. Why can we go back to that? Let's go back to there.

0:25:09 Andrew: Yep. Yep, and problem number four, that when you have that gap, that remaining gap, lenders disproportionately screw people at the bottom, And right? That, of course, has a racial implication as well, So right. Let me give you an example of how this plays out today. When you have limits on payments for low-income folks, that is, have a Department of Education regulation currently limits the maximum you can be required to pay back on your student loan. And I'm going to talk about the changes made to that program. It can reduce those payments and maybe even reduce them to zero. But the problem is that in doing so, for particularly those at the bottom of the scale, you are now waiving, right, because interest in any given loan, the lender collects interest first and then principal.

0:25:17 Thomas: Yeah

0:26:13 Andrew: So suppose you're only paying 80% or 50% of the interest, right? So what happens is the interest continues to roll forward. And so you can wind up with, and we have millions of people in the situation where they have been paying on their student loan for a decade or more, and yet their total loan balance now is higher than it was before they started the program. Because they haven't had to pay the interest and it has rolled forward. And if you're thinking, why does that matter? Well, the answer is because the goal is to lift them out of qualifying for the program. But now, right, you could be in a situation where you get a better job, you you graduate out of the program and you're stuck with a, you now no longer get the limitations on your payments, and the lenders can go after you for that entire balance, and you are just screwed.

0:26:41 Thomas: Yikes so you might want to not take a good job, right? I mean, books

0:27:16 Andrew: Yeah. No, that's a real disincentive. That's an economic disinventive that these folks ought to be looking at. And I will tell you, sort of spoiler, the Biden plan fixes that problem. That, so right, those are our problems. Right, number one, cost, cost has tripled. Number two, seventy percent are borrowing money. Number three, the the money that's available in grants used to cover a public school tuition, eighty percent of public school intuition, uh, and now covers less than a third of public school tuition. Yeah.

0:27:48 Andrew: And number four, that when you have that gap, it disproportionately screws those at the bottom. Again, remember, Republicans think these are features, not bugs. They are trying to discourage higher education altogether or at minimum to reduce it to a cost benefit calculation. I have seen that on display this week, dropping my kid off at school, right? The number of parents that I've talked to who are like, who will look at Alex and be like, oh, what's your major? And like, that's an idiotic question to ask a kid that hasn't started college yet. And my son is in the overwhelming super minority of kids who are like, well, I'm pretty interested in international affairs. I think I'd like to go into public policy, right, like that's the answer that he gives.

0:27:45 Thomas: Covered some books for me anyway yeah

0:28:36 Andrew: He ought to be giving the answer, right. What college is meant to do is have an informed and educated and critical populace to say, I'm at a liberal arts school.

0:28:41 Thomas: I just got here man I don't know

0:28:46 Andrew: Yeah, I am going to find out what I am good at and what I like. It really is. It was literally his first day. But has become an accepted question because it's so ridiculously expensive that everybody – put an asterisk next to that. But it's rational for folks to say, all right, well, why am I buying this six-figure asset unless I expect it to pay off down the line?

0:28:46 Thomas: It's my first day yeah yeah it's rational for me to say, I guess, business, I donno, that sounds money related, related, remind

0:29:18 Andrew: Yeah. So that's part of the structural problem. I want to tell you, and again, – we're going to talk about all uh of the features in in this plan. This plan does not solve the structural problem. It does not do anything about item number one. Okay, that did, there you will hear the

0:29:36 Thomas: Us what item number one was, everybody yeah okay, gotcha because that's been one of my big worries in the crowd of forgive everything, no college debt, and and believe me, like I I broadly support that endeavor, I want to reduce the burden, um, but one concern for me is, well, then doesn't that just incentivize, you colleges or lenders or whatever to just go back back and do the same thing or do it worse or, you know, like it doesn't, it's not going to solve the problem, right? Yeah.

0:29:38 Andrew: Fact that the average cost of college has tripled over the last 40 years. Yeah. So I don't know the answer to that. Um, I I I do know that, right, there are, and we're going to talk about like the economic arguments, right, the potential inflationary impacts, even of what the Biden plan is doing. I will tell you, you know, a double edged sword. Right. Biden did not promise to do anything, right, on the campaign trail about the overall cost of college. Joe Biden said, I promise to relieve ten thousand dollars in student loan debt. This plan actually does a little bit more than that, a lot more than that. We're going to talk about what it specifically does do. But I want to, this is the analogy that I kind of came up with. And there are some maybe holes in it, but I'm thinking if in 2009, 2010, we had gotten a bill, forgave medical debt, but I'm thinking compared to the ACA, right? And I'm just sort of looking at it going, okay, well, that recognizes that there's a problem, but that structural problem is going to continue unless we do something bigger

0:30:59 Thomas: Oh okay, right temporary relief for some people is really what that would be, and that's good, but yeah, and part of me, I could be wrong, but I I worry that like banks and colleges and whoever can use this to their advantage too, to like increase prices, and maybe, and and maybe, uh, the the mindset will be like, oh, this might get forgiven anyway, so take on even more debt in the future, I don't know, or they'll, they'll need to sell that much more debt or whatever to lend that much money to make up for this, this loss, although this is entirely federal government stuff, right?

0:31:13 Andrew: Yep yep and will talk about that, but but yes, right, right? This is 93% of these are loans that are backed by the federal government. 7% are private sector loans.

0:31:50 Thomas: Okay okay but backed by the federal, just to clarify real quick, does that mean that like there's still a normal profity bank involved, but the federal government should. Okay. So they're still involved in the process. Good.

0:31:56 Andrew: Yes, yes, there is a normal, yeah, that's exactly right. And I'm going to talk to you about something that nobody has talked about. In fact, let's pull that pin out now and talk about it because I found out about slabs.

0:32:12 Thomas: Love it. Slabs.

0:32:18 Andrew: Yep. Thomas, slabs are student loan asset-backed securities. And if you're thinking, boy, didn't packaging together mortgages wind up to totally destroy the economy in the mid-2000s. I'm here to tell you that this thing that does exactly the same thing, Right, that is packages Together tranches of federal student loans and then issues securities based on the repayment of those loans with minimal to no oversight of how likely those loans are to be repaid are, in fact, securities that, not you or I, but that extremely wealthy people can purchase right now that are backed by the potential value of these packaged together loans and the securities that are issued therefrom. So, yeah, when you say, are there still private lenders involved, not only that, but they have divvied up every possible slice of this until, of course, the next terrifying security that is literally commoditizing human beings comes along.

0:32:25 Thomas: Oh yeah. That sounds familiar. Yeah. Yep. Yeah. But

0:33:37 Andrew: Long. But yeah, so no. Whether student loans gets repaid is something that is of tremendous interest, not just to moralizers and to banks, but to people who hold securities that will become worthless in the event that lots of people default. And so, you know, that just throws another fantastic monkey wrench into this entire process.

0:34:05 Thomas: Episode is brought to you by the Jordan Harbinger Show. I've told you all about the Jordan Harbingers Show, and I'll tell you about a different aspect of the show that I haven't mentioned thus far. It's the Feedback Friday. These are a lot of fun. They're listener questions and situations that are fascinating, actually. And Jordan and company their best to help the listeners through these complex situations. So, for example, through. Your significant other of five years refuses to acknowledge their social anxiety as a problem, but it's always used as an excuse to get out of doing things with you in public. So what do you do? Interesting situation. Or another one. Adopted and raised by a loving family, A listener was curious enough to still seek out their biological parents and learn the story when they reached adulthood. It turns out they were the result of a forbidden tryst between a traveling American woman and a married Australian man.

0:34:53 Thomas: So what do you do? That's a fun one. I plug so many other things. Great guests all the time. Political, sports, lots of categories. I thought it'd be fun to plug the Feedback Friday, So go search for the Jordan Harbinger Show. That's H-A-R-B as in boy, I-N as in Nancy, G-E-R on Apple Podcasts, Spotify, or wherever you listen to podcasts.

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0:36:51 Andrew: Now we get into, so let's transition to what this plan actually does, right? And the answer to that question depends upon the precise rulemaking that occurs at the Department of Education, which have not yet been made public, So I am going by the statements that have been released. I will link them in the show notes. There is a summary of the program over at the DOE. It's at studentaid.gov slash debt-relief-announcement that contains all of the details that the agency has released right now. Now, this has been a tough episode to do because, you know, I don't have the specific policy changes, but you open up with a good one.

0:37:49 Andrew: This is based upon the idea of the Department of Education releasing its rights to collect on certain obligations. Applications, how that gap will be filled, is a really, really important question, You right? Could just cross it off. Again, for 93% of these, you can just cross it off the ledger and say, well, you know, some of it we thought wasn't going to be repaid anyway. Maybe some of that will, you now, come back and, you will be able to allocate it out of of the general budget, that but general question of where does the money come from is a crucially significant constitutional question, as it turns out. Described So what the plan actually does, Number one, the executive orders that date back to the Trump administration that put a pause, a moratorium on student loan payments are scheduled to come to an end on August 31st.

0:38:02 Thomas: Hmm.

0:38:53 Andrew: That's a week from now. Right. Next week. And this bill extends that to December 31st, it is described as, quote, the last extension. So if you have not been paying your student loans during COVID, which I strongly recommend not paying your students loans during COVID, don't take financial advice from a podcast. That was going to be a potential big question mark. It's something we have talked about that has been extended to the end of the year. Aspect of that is if you you have made any payments during the moratorium, this executive action has specifically stated that you have the right to get those payments back.

0:39:37 Thomas: Nice.

0:39:37 Andrew: Yeah. So let suppose you are on team, wait, you're refunding $10,000 to $20,000 of student debt. I just paid off all my loans.

0:39:38 Thomas: That's good.

0:39:47 Thomas: Yeah.

0:39:48 Andrew: Well, if you qualify, right, and you paid off $10,000 worth of loans over the past two years, of my THIS is that, yes, this one weird trick should work, You right. Have the right to have that $10,000 refunded to you.

0:40:01 Thomas: Not even a weird trick. Seems like a very intentional, normal trick, right? Not

0:40:04 Andrew: Yeah, I think that's right. There you go. So do you become eligible, right? This is $10 thousand in debt cancellation, which is means tested. If your income is below $125 thousand for the individual, $250 thousand for family, I want to tell you, this is a morals clause that has been slipped in here, It right? Is estimated that there are 45 million borrowers. It has estimated that this will affect 43 million borrowings as of right now, And the additional cost to cover that $2 million in borrowers seems like, from all available estimates, that it would be, compared with the overall package, reasonably negligible, right? This is going to hit 95 percent anyway. That has been put in to satisfy the moralists attacking these provisions from both sides. Right. You have the bad faith Republicans who are like, well, I paid off all my student loans, so I don't see why anyway.

0:41:05 Thomas: In 1984, I paid off all $2,000 of my loan.

0:41:11 Andrew: I as I put it the other day, it was like, will I beat cancer? So I don't see why any of you scrubs should get a cure. Like I. The whole point of a society is you look at the people who are worst off and say maybe we should do something to help them. You and I paid off all of our student loans. Right. It took me 20 years, I know it took you, 12, you 13, right, and you were super disciplined about it

0:41:14 Thomas: Yes.

0:41:33 Thomas: Think it took me eight years now that I think about it. Yeah.

0:41:34 Andrew: Eight Okay I'm I mean, it took, it really did take me almost 20 to pay off mine. I don't begrudge that for a second, right? Wait, Who would, that's, you could literally take any government program and go, I don't benefit from that, so nobody should benefit from that. Well,

0:41:42 Thomas: But I'm Glad. I mean, there is a not unfair concern that if you, if you're someone who just like, I believe in paying my debts and this whole time I've been making sacrifices to keep paying off these loans and then they got forgiven or whatever, I'm glad there's that this provision that's like, oh, okay, well, you still get relief because you paid during this tough time. If you qualify, you still get, you know, the 10,000 or 10 or 20,000. I don't even know. 10,000?

0:42:14 Andrew: So it is $10,000. It is $20,000 if you qualify and also you have received a Pell Grant.

0:42:21 Thomas: Okay. Yeah. So that, but it's good. Like if you made the sacrifices and you were fortunate enough to be able to make payments at a time when you, I guess you really didn't have to, but like, it's good that those people will also get relief.

0:42:33 Andrew: Yep. So as out, this is doubled if you have received a Pell Grant, that is going to wipe out the debt. So that up to $20,000 in forgiveness is going to wipe out the debt for 20 million people, almost half of student loan borrowers. Now, it will not wipe out almost half of debt, because the more expensive the school that you went to, the more debt that you have, and that tends to be accumulated at the higher income end. So, you know, the folks who are getting no relief and the folks who are getting the $10,000 in relief are more likely to get, $10,000 in relief of a $50,000, $60,000, hundred-thousand-dollar debt.

Also, all of this applies to undergraduate loans. None of this applies to graduate school loans, which is its own problem, right. Like it's it is crazy that in the same way, you put right, that all in the structural box of things that, you know, work that we have left to do, because there was a lot of work that you have to do. I want to continue with the points of the plan. The DOE largely already has this info. So much like pandemic checks, right, this is not a thing that you you have to apply for.

If you do want to, you know, dot your J's, you can go to ed.gov slash subscriptions. And there is a box for federal student loan borrower updates. So you can make sure that you get up to the minute updates regarding you as a borrower. But by and large, you shouldn't have to do anything. So that's

0:42:52 Thomas: Ah, oh, interesting. Yeah.

0:44:02 Thomas: Nice.

0:44:03 Andrew: A good thing. Yep. We talked about the repayment plans that are being administered by the Department of Education right now, what they do is they calculate your discretionary income. So they take your income, they subtract food, housing, stuff like that. And then they cap their repayment at 10% of your discretionary income. This slashes that to 5%, right? And it closes that carried interest loophole, so,

0:44:28 Thomas: Interest loophole. Oh, that's the same. That's the, that's the thing that Kirsten Sinema, got kept rid of in the in the bill that

0:44:30 Andrew: I'm using the same language as that, you know, Tax-free, very, very different thing. What I mean here is previously, you were capped at 10% of your discretionary income. And if that did not cover 100% of the interest, then your interest would roll forward and you could have a total balance due on your loans because they collect interest first and then principal that accumulates over time through your participation in the program. Here, that provision is canceled out? So the interest cannot add to your balances over time. And the ladder itself, of payments is tagged not to the poverty line, as it previously was, but is tagged to a $15 an hour minimum wage. Funny how that keeps coming back, there's right? No executive authority to increase the minimum wage, but here, if you earn less than a full-time $15-an-hour minimum wage—that'd be about $30,000 a year—your payment will be zero under this program. And it used to be, under this repayment program, if you made payments for 20 years,

0:44:37 Thomas: Yeah. That's a very different thing. Yeah.

0:44:52 Thomas: Gotcha. Oh.

0:45:40 Andrew: At the end of the 20 years regardless of what your balance was, the amount would be forgiven now that is being slashed to 10 years so long as the remaining balance is $12,000 or less. Yep, I agree, yep, no, we got, like I said, more work that we have to do but

0:45:48 Thomas: Nice, okay. But that means more relief than maybe we're thinking on paper because that's going to be in the future, right? Yeah.

0:46:03 Andrew: Yeah, and relief over time. That's exactly

0:46:07 Thomas: Yeah. Well that's good.

0:46:07 Andrew: Right. Yeah. And again, you, 20 years is what it took me. Eight is what, you know, that's almost 10, right? That is, you can work in, and there are really two ways in which this happens, college degree and it has not increased your earning power. That's what we don't want. Number two, what we do want is you get a college degree or even an advanced degree, but you have chosen to work in a charitable sector.

0:46:13 Thomas: Yeah.

0:46:37 Andrew: Chosen to work in an organization that is a nonprofit that volunteers. Exactly. It is at the lower end of the pay scale. Either way, slash that in half from 20 years of making payments under the plan to 10 years of making payments under the plan is a massively significant change. The final bit, and these are changes to the Public Service Loan Forgiveness Program. These are very, very technical. But basically, borrowers who worked in public service are entitled to earn credit towards loan forgiveness, even separate from that 10-year payoff. But the program's kind of a mess. And shocker, it was made more of a Mess by the Trump administration that made it harder to figure out what the requirements were and out more folks And, you know, had arcane rules overseeing the eligibility requirements, all of that.

0:46:37 Thomas: All

0:47:28 Andrew: The Department of Education is now going to propose regulatory changes to make that more efficient, allow more payments to qualify for the PSLF, including partial lump sum and late payments, allow more deferments, more forbearances, right, for people who take some time off from a high paying job to go into the Peace Corps or AmeriCorps or serve in the National Guard, that sort of thing. So a package of reforms that is designed not only to unwind the nonsense that Betsy DeVos did, uh, but make real progress forward. So that's the Biden plan. Want to ask you a question, and and it's a harder question than you might think.

0:48:11 Thomas: Right, that's the bar. So, Thomas, takes the bar. Here we go. Can a robbery happen at night? Um,

0:48:12 Andrew: Why would the executive branch have any ability to do any of this, right?

0:48:24 Thomas: Is it because the Department of Education, as an executive agency?

0:48:31 Andrew: But why do they get to do it

0:48:32 Thomas: Because they were delegated to by Congress at some point in the past that you talked about?

0:48:36 Andrew: No, you are exactly correct, this authority for the Department of Education stems from, must stem from, an express delegation of authority given to it by Congress. And now the question is, has Congress delegated to the Department of Education the authority to cancel some or all student loan debt.

0:49:03 Thomas: I can answer this. It doesn't matter because the Supreme Court will say no.

0:49:06 Andrew: And you are terrifyingly close to correct. The answer, I think, is maybe. In the negative side due to one of the parting gifts from the Supreme Court's last term. In fact, the very last case they decided, something that has been on our whiteboard to discuss, a case called West Virginia v. EPA, but even before we get to West Virginia versus EPA, I want to tell you that until last week, the answer to the question, could Joe Biden do any of this was not just maybe, but was an unequivocal no. And here's why. The answer, of course, is because Betsy DeVos is evil.

0:49:53 Andrew: So on January 12th, 2021, eight days before she left her office, she left us a parting gift. And that parting gift was in the form of a memo that she had commissioned from the Office of General Counsel at the Department of Education, answering the question, hey, do I have the authority to generally forgive student loan debt? Now, this was not because Betsy DeVos was ever interested in forgiving student loan debt. This is because Betsy DeVoss knows that a binding letter from the Office of General Counsel is just a sternly worded crunch wrap, but that that remains binding on the organization until replaced with another letter? So you had to go through and refute the legal arguments that are made in this letter before you had the opportunity to do anything.

0:50:18 Thomas: My God. No.

0:50:43 Thomas: Wow. Let me get this straight, Andrew.

0:50:47 Andrew: Yeah, that

0:50:47 Thomas: This horrible goblin who ruined our school system for four years or however long she was actually in this spot for pure evil purposes or probably just pure profit purposes, I'm sure, like it. So they wouldn't, Biden wouldn't even be allowed to forgive student debt, just like preemptively tried to just drop a deuce on the desk that was, "Hey, on my way out, you can't do anything good after I'm, I'm done."

0:51:10 Andrew: Is exactly correct.

0:51:12 Thomas: But how do I reconcile that with the fact that Republicans and Democrats are the exact same party? I don't understand. There must be something wrong here. It's almost like that's not at all true. But the Internet told me it is true, Andrew.

0:51:24 Andrew: I'll let that speak for itself. Biden department of education had to go looking for an affirmative justification right for the right of the department of education to...

0:51:39 Thomas: I'm Sorry. Right, why haven't we been talking about this? Why hasn't this been why is this the first I am hearing of this specific thing, Andrew? Because we have had almost two, a year and a half or whatever, of "why won't Biden do it," "what, today would be a great day for Joe Biden to forgive student," "why hasn't anyone told me, but he can't yet."

0:51:58 Andrew: So could talk about that, but I want to add this, okay? And that is, I am going to include a link to a group, right? Will not be hard to infer the nature of the group. It is called flickofapen.com, and they are exactly what it sounds like, right, a group designed to hold Biden accountable for, you know, not living up to his promises. And they promulgated a draft executive order in February of this year, and he said, you should send this to Joe Biden. It's got a little, like, built-in, clever, little red and yellow, you sticky tab, except it's, you known, written on the document itself, says, sign here, President Biden. And it's like, yeah, with just the flick of the pen, Joe Biden can eliminate all student debt, right? So this is debtcollective.org, is website for this. And when you read this executive order, the source for authority that this is one weird trick, far left progressive organizations urging Joe Biden to execute was the authority under the Heroes Act of 2003, which allows

0:52:12 Thomas: Yeah.

0:52:39 Thomas: Heroes Yeah.

0:53:14 Andrew: The Secretary of Education to settle certain student loan obligations in a war or in a national emergency. So this is the HEROES Act of 2003. You can have certain kinds of loan modifications that take place in the event that there is a war, military operation, or national emergency. And if you're sitting there thinking like, that seems like maybe it's stretching it a little bit.

0:53:47 Thomas: Well, fortunately the U.S. is always at war, so I guess there's that, you know. But until now, now I found Biden's dastardly plan. That's why he pulled out of Afghanistan, so he wouldn't have to forgive any student loan debt. I found it, Andrew. I find it. Their parties are the same. I've found definitely the same

0:53:59 Andrew: Letter that replaced this from Lisa Brown, general counsel at the Department of Education, to the secretary, Miguel Cardona, August 23rd, 2022, two days ago, the Secretary's Legal Authority for Debt Cancellation that specifically supersedes the DeVos memo cites as a basis for the authority to do so the HEROES Act, 5 U.S.C. Section 552A. In other words, I want to make this as clear as I possibly can. If you are a member of the progressive left, what the Biden administration has done is, number one, adopted the reasoning that progressives urged it to adopt in connection with debt relief.

0:54:50 Andrew: And number two, they have taken a position that doubles the campaign promise they made. Biden's campaign promise was not, I will eliminate $20,000 in student debt. It was, I will write off $10,000 of student debt. This is $20,000 of debt for anybody who received a Pell Grant, and $10,000 for those who did not, means test it $125K, which gets to 95% of people. So I do not, again, we have said throughout this episode, is this enough? This is not enough. This does not hit the structural issues. There's lots more work to be done. But if you were evaluating a Joe Biden campaign promise, the idea of, well, I have to vote for the Green Party candidate in order to send a message, you can't do better at sending a message than having having an administration, move to the left after it got elected.

0:55:40 Andrew: This is a clear and convincing illustration of the administration listening to its left flank. And I think the fact that the surrogates that have been sent out in the past two days are people like Elizabeth Warren is a pretty strong indication of where that's coming from. This has not come from the Joe Joe Manchin, Kristen Sinema, you know, I don't want even get to call them wing of the party. They're not a wing of the party. They're just two obstructionist jerks.

0:56:09 Thomas: There are two gremlins hanging onto the wing of the party that only William Shatner can see. Oh,

0:56:15 Andrew: That's right. Let me go very, very quickly to, yeah, but could they do more? And I will tell you this. And again, you know. All right. You know, we put our political cards on the table, we've been saying all along, let's, right, get out there and deliver more Democratic representatives and Democratic senators. I think it will be very difficult to uphold these regulations. I think going any further would absolutely be struck down by the Supreme Court, and it would be struck down under the West Virginia versus EPA major questions doctrine. Now, this was a Roberts opinion, so, right? This was a 6-3, not one, you know, where we managed to pick up, Robert, this is, you know, what mainstream conservatives want.

0:57:03 Andrew: It's a horrible, horrible opinion, but it's one that we have to work with it, right right, now. And the question in that case was having Congress, having delegated to the EPA the ability to require that it promulgate rules for power plants to adopt the, quote, best system of emission reduction, end of quote. Could that be construed as requiring coal-fired power plants, to include a requirement that such facilities reduce their output or subsidize other generation by natural gas, wind, or solar sources, i.e., yeah, it should be, right?

0:57:41 Thomas: Easy. Thomas takes the bar. Yes. Done. Yeah.

0:57:44 Andrew: But instead, right, and it should because if you were just reading the statutes, all you have to do is find, like, is this within a permissible reading of the delegation of authority? But the Roberts Court decided to invent something that they call the major questions doctrine.

0:57:45 Thomas: Next question. That That's a freebie.

0:57:59 Thomas: Oh, yeah.

0:58:00 Andrew: And it goes like this, and I'm going to read this

0:58:03 Thomas: Oh, I think the major questions doctrine is, if it's something that conservatives on the court don't like, we've decided that it's a major question and you can't do Is it. That, am I close?

0:58:12 Andrew: Kind of, yeah.

0:58:13 Thomas: Okay, let's see.

0:58:13 Andrew: It says, thus, in certain extraordinary cases, both separation of powers principles and a practical understanding of legislative intent make us reluctant to read into ambiguous statutory text, right? Now, mind you, that is statutory text that would permit a reading that would allow the agency to have been delegated this authority. The delegation claimed to be lurking there. To convince us otherwise, something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to, quote, clear congressional authorization for the power that it claims. So what is a major case? Right, it's anything the conservatives don't like.

0:58:29 Thomas: Oh, very ambiguous. Yeah.

0:59:02 Thomas: Yeah.

0:59:02 Andrew: But in looking at EPA, West Virginia versus EPA, the question is, is radically changing the student loan landscape a major question and extraordinary? Of course it is, Would, right? Forgiving debt for 45 million people be an extraordinary question? Of course it would be. And so I believe I firmly believe that the best explanation for the delay and for the scope of what has been now released and for coupling it with other action. So, for example, with ending the pause, idea is that that was going to be the counterinflationary aspect. We're going to forgive the debt, but we're going to start collecting it again. Right now, you've been paying zero on your student loans. We're going to go back to collecting that, but we're going to forgive the debt for 43 million people. We're gonna forgive some portion of it for 43 million people. Effectively, get rid of it for 20 million people. Administration will be able to go to the Supreme Court and argue, no, we narrowly tailored, right?

0:59:17 Thomas: Yeah.

1:00:08 Andrew: We did not engage in an extraordinary effort. We engaged in a narrowly-tailored effort. I agree with you, you know, yes, too, and they may have to say this on the record, right? Yeah, it's going to require an explicit congressional authorization to forgive all debt. I believe that's the result the Supreme Court is going to reach. Now, if you're saying, should we also pack the Supreme Court and overturn West Virginia versus EPA? You know, we're on board with that, of course, right? We are. The

1:00:17 Thomas: Yeah.

1:00:35 Thomas: Wait, are you saying you think that this will hold up in the Supreme Court?

1:00:37 Andrew: I am not saying that. I am saying that I think that there's a better chance of this holding up than the broader program, then, right.

1:00:43 Thomas: Oh, yes. Right. Wait, the broader program, the one he didn't do? Or okay.

1:00:50 Andrew: Yeah. Then a program of complete debt forgiveness. So if you are looking for an explanation, that's

1:00:51 Thomas: Yeah. Right. Right. Right. Well, It's also what he promised to do but yeah, yeah.

1:00:59 Andrew: True. If you were looking for an explanation of where do we go, how do we make larger structural change, I think the answer is, at least in the foreseeable future, and maybe notwithstanding even the composition of the the Supreme Court, you that that's got to come from Congress. That's got to come the of government that has the spending power. And, you know, I don't want to say that because it's broken, obviously, right? The West Virginia versus EPA case is, you know, a politically motivated case. Uh, we know that it is designed to reach conservative outcomes. Um, There is lots more that I could discuss. There is a law review article that suggests that nobody would have standing. I'll link that in the overall notes. If you get those, um, know that I had written a lot more about this, uh, but obviously we're Super Late.

1:01:23 Thomas: Yeah.

1:01:48 Thomas: But We're already Very Long. And I turn this around nearly instantly so um, Yeah, no, I really hate to be the downer Thomas here, but like this, I just really fear that this won't fly in the Supreme Court and it's all the more. Maybe it will. And I think you're totally right. It seems to me that this was specifically crafted to try to make that appeal and to try to make it more palatable for this horrible court. But even if it doesn't, this was a good step. And it's a sign that Biden was listening and was moving left and all that stuff and trying to fulfill campaign promises. But it's also a sign that we need to grab a couple seats in the Senate who believe in getting rid of filibuster the and hold on to the House. And that's, I mean, we just have to. There's no, to get real change, that's what we have to do.

1:01:52 Andrew: You. Do I?

1:02:39 Thomas: This is the shortcut cheat code method that we're trying, and we'll see if it works. But it's not a permanent solution,

1:02:45 Andrew: I think that's exactly right, I think that's the best way to put it, absolutely.

1:02:48 Clip: Oh, no associate of this firm has ever failed the bar exam. No kidding.

1:02:54 Thomas: And now it's time for T3BE, Thomas Takes the Bar Exam. Each week, I attempt to answer a bar question while cleaning up dog piss in every single carpet that I own in the house. That's a newer addition to the game. So let's see if that helps me somehow. What's this week's question?

1:03:05 Andrew: Yeah. Thomas, a woman and a piano teacher entered into a contract whereby the teacher would give the woman piano lessons once a week for three months, and the woman would pay the teacher an hourly rate. The contract contained the following provision, quote, "The parties agree that neither will assign the contract, end of quote.

1:03:29 Thomas: The hell? OK.

1:03:31 Andrew: The piano teacher's sister was in need of money. The Piano Teacher reached a written agreement with the sister to assign the Piano teacher's right to collect the money from the woman to the sister. Which of the following is a true statement?

1:03:47 Andrew: A, the piano teacher's assignment is invalid and the piano teacher breached the contract with the woman. B, the piano teacher breached the contract with the woman, but the assignment will still be effective. C, the piano teacher's assignment is valid so long as the woman gave permission for the piano teacher to do so. Or D, the piano teacher assignment is valid and the sister will be able to sue the woman if she does not pay.

1:04:13 Thomas: Boy, I used to love contract law, Andrew. I used to love it. But this, this is, it sounds very specific. "The parties agree that neither will assign the contract." So I have to assume that, based on my experience with this bar exam, this is a super easy, direct question and you just can't assign the contact, end of question. Or maybe that's something that you're like actually not, not allowed to write in a contract. Like maybe contracts are always assignable or something, I don't know. Let's see. "Piano teacher reached a written agreement with the sister to assign the piano teacher's right to collect the money from the woman to the sister." Another wrinkle in here might be that nothing has happened yet.

1:04:58 Thomas: Be one, like, thing if, like, the sister tried to collect money, like, shows up, who's knocks on the door, goons, Hired goons for the piano teacher, and tries to collect the money, but nothing's really happened yet. So that could be another trick here, which is like, maybe the piano teach just did a worthless piece of paper with the sister, but nothing happened. So that could a wrinkle. Let's see. And, "Which of the following is a true statement" is a dastardly question, I love that.

A, "The piano teacher's assignment is invalid and the piano teacher breached the contract with the woman." Neither will sign, so, that's a complicated one, because I could see, I could see that absolutely being the easy no-nonsense answer, but also, did she breach the contract if nothing's happened yet? Like, yeah, she assigned it, but again, if the sister hasn't collected any money, has there really been a breach until that actually happens, like until that matters? I don't know.

Could be, a A's is certainly the no- nonsense one. Be, the piano teacher breach the contact with the woman, but the assignment will still be effective. So that's, that's a, that's it, curveball. That's a wild card.

1:05:58 Thomas: That's true, would mean that you can put it in the contract and it's enforceable, but you're always still allowed to assign contracts. I could conceive of a way that's truth, but that's a tough one. I think that's the least plausible one so far of the two. See, the piano teacher's assignment is valid so long as the woman gave permission for the piano teacher to do so. Now that's a complicated one, you would, I think this is an attractive distractor, I could be wrong, but I think this is the one where you're like, the, if you, well, know you're just looking for a true statement, and you're like, well, as long as the woman gave permission, but I, uh, is this right? I feel like we've had a con, like contract stuff, stuff before. Are you allowed to just be like, yeah, don't worry about that part? Well, maybe, maybe you are, but then that means you forfeit the right in the future.

1:06:45 Thomas: Okay. Are you allowed, if you're in a contract, are you allowed to just be like, yeah, go ahead, don't follow that part. Does that mean the assignment is valid? So see, actually, that's a that's either the answer or an attractive distractor. Not sure. D, the piano teacher's assignment is valid and the sister will be able to sue the woman if she does not pay. So that would be under the idea that it's like, yeah, you can always assign a contract and can't... Sounds like I'm Mario and I'm saying you can sign a contract. You can always sign a contact. It's me, a Mario. And the piano teacher's assignment is valid. And yeah, that would mean you could always assign a contract and, and the, and if you stipulate in a contract that you can't assign it, that it's meaningless garbage. That's, that's a tough one. I could imagine it being true, but you know, it seems, so I think I'm between A and C and I have, I think any answer could be right on this. I just don't know. C seems so attractive because like, you're just looking for a true statement.

Is the assignment valid so long as the woman gave permission for the piano teacher to do so? Is that that true? Because I think you have to amend the contract or something. Don't you have to? Oh man, I feel like we've had something about that. Teacher assignment is invalid and the piano teacher breached the contract. Oh man. The only other wrinkle I can think of is maybe assigning a contract.

1:07:19 Andrew: All.

1:08:08 Thomas: I don't know what that actually means. Does that mean like transferring it to someone else? Because at first I was like, oh, is the piano teacher going to transfer this to another piano teacher? Like, hey, you just take this on. But small wrinkle, the piano teach assigned the piano teacher's right to collect the money. And so is that like, oh, is that the equivalent of like, yeah, we have a collections company that we use to like collect the money. It doesn't mean you've moved the whole contract, but they have the right to collect the money. That could be a little wrinkle that would make like D correct, I guess. Just have no idea, and I'm gonna just, based on how hard the questions have been, I'm doing a purely, like, every single question is an asshole, and every question is a trick question, I'm I feel like there's gonna be some weird thing where it's like, they didn't assign the whole contract, just part of it or something, I don't know. I'm going with D, because of the impossible, I plead the impossible, I don't even have a second choice. This question's impossible. D.

1:09:06 Andrew: Right, and if this question is impossible, or not impossible, for you, you want to join in, play along with Thomas, you know how to do that, just share this episode on social media, include the hashtag T3BE, include your guess, your reasons therefore, we will pick a winner and shower that winner with never-ending fame and fortune. Fame and fortunate not guaranteed.

1:09:22 Clip: And thank you, Let's go!

1:09:23 Andrew: Yeah.

1:09:24 Thomas: Now it's time to thank our new patrons at patreon.com/law, enjoying the ad-free episodes, all the goodies, the early episodes, so much good stuff, many good reasons to become, oh, by the way, and the ability to suggest new intro quotes, which will be in effect next episode, so next episode, we'll have new intro quotes and

1:09:40 Andrew: And They'll get, get that episode Early, so yeah.

1:09:42 Thomas: They'll get that episode early. And as you're hearing this, you still have time to submit your quotes only if you're a patron. So go find that thread. And I only accept quotes from the thread. No emails, no any other form. There's too many. I'm sorry. Just that patron thread is the only way. So if you would like to do that, you should join these fine folks. Why don't you go first, Andrew?

1:09:44 Andrew: Ah. Yeah.

1:10:03 Andrew: That is HoldTheHouse, I'm with you, Ben Sweetser, AndreGG, Ken Malsky, IANAL, also I am not a lawyer, Richard Silvera, and Nick Walther. Take it away, Thomas. Yeah.

1:10:21 Thomas: I can't read that acronym any other way, too, I Every Single Time I don't know why someone decided that's a good idea. Matthew McCawley, EnjoyTheScenery, Anup Chenthamarakshan, TexasChainsawLawyer.com loves to sue cops and landlords, Benny K, bicycle lawyer, Becoming a patron after binging the entire, if you're a bicycle lawyer, I would, I wonder what the, like, the interaction with a bicycle cop is like. Could you do a whole, like, bicycle interrogation, where you're like, you're on a bicycle, the, the cops on a motorcycle, the suspects on a cycle, and you're not, that question, don't answer that question, you're all just cycling.

1:10:25 Andrew: No. That that's Of course. See.

1:11:02 Thomas: That'd be fun.

1:11:03 Andrew: But Mine just immediately went to, I don't know, it'd like, like a Far Side cartoon of, you know, you see the shop that says Bicycle Lawyer, and then you just see somebody like who's crashed their unicycle, like looking forlornly in the distance, like, "Sorry, it says here we need to have two wheels, right?" Anyway, there you go.

1:11:22 Thomas: Wow. What an imagination. You're like Phoebe. You just come up with all these scenarios. Yes. Becoming a patron after binging the entire podcast in 2022, what a ride. Whoa. You binge the entire thing. Wow. That's crazy. And Chloe Cleveland. Thank you so much. New patrons. And that's our show. I am really looking forward to Tuesday. You've already teased it. Not only a new intro quote thing, but also some some very fun Trump filings. Can't wait. See you.

1:11:27 Andrew: Not breaking news that we will have to cover that is literally hitting us just now, and that is Judge Reinhart has apparently required the release of the redacted warrant in the Mar-a-Lago case. The DOJ has until tomorrow to appeal that. So we we may have to do some shenanigans, Thomas.

1:12:13 Thomas: Wow, we'll tune in then. I can't wait.

1:12:16 Clip: I move for a bad court thingy. You mean a mistrial? Yeah, that's why you're the judge and I'm the law talking guy.

1:12:50 Clip: www.openargs.com. Be sure to join the Facebook group at facebook.com slash groups slash Yodel Mountain and follow us on Twitter at OpenArgs. This podcast is a production of Opening Arguments Media LLC, all rights reserved. It is produced with the assistance of transcriptionist Heather Leverage, production assistant Ashley Smith, and additional contributions from Morgan Stringer and Debra Smith. Special thanks to Teresa Gomez, who runs our live shows and heads up the OA Wiki, follow at OA Wiki on Twitter. Additional thanks to the moderators of the Opening Arguments Facebook community, Emily Waters, Alicia Cook, Eric Brewer, Natalie Newell, Brian Ziegenhagen, and Teresa. And finally, thanks to Thomas Smith, who edits the show and created the fabulous theme music, which was used with permission.