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Biden Announces New Measures To Ease Student Loans After Supreme Court Blocked $430bn Debt Relief

President Joe Biden on Friday announced new measures to provide student loan relief to Americans and condemned the U.S. Supreme Court for blocking a plan to cancel hundreds of billions of dollars in debt that was popular with his voters.

Thwarted by the conservative-leaning court, Biden told reporters that his administration would pursue student loan relief through a different avenue, the Higher Education Act. The Education Department launched a regulatory “rulemaking” process that is likely to take months.

In a 6-3 decision earlier on Friday, the Supreme Court blocked Biden’s plan to cancel $430 billion in student loan debt. The ruling, which was welcomed by Republicans, threatened to dismantle part of the Democratic president’s policy agenda.

Biden said his administration would pursue a different way to achieve his goal.

“Today’s decision has closed one path. Now we’re going to start another,” Biden told reporters. “I believe the court’s decision to strike down my student debt relief program was a mistake, was wrong. I’m not going to stop fighting to deliver borrowers what they need, particularly those at the bottom end of the economic scale.”

As part of the overall plan, the Education Department finalized a program to reduce payments that borrowers with undergraduate loans have to pay monthly to 5% of discretionary income rather than 10%, which the administration said would help them save $1,000 a year.

Loan forgiveness would be offered to borrowers with balances of $12,000 or less after 10 years of payments rather than 20 years – a benefit aimed at helping community college graduates.

Progressive voters, who are part of the coalition that helped elect Biden in 2020, long have put pressure on the White House to address student loan debt; the court’s decision intensified calls for further action

“The President has more tools to cancel student debt – and he must use them,” Democratic Senator Elizabeth Warren, a leading progressive voice, said on Twitter after the Supreme Court’s decision and before Biden spoke.

Progressive House Democrat Alexandria Ocasio-Cortez urged Biden to use authorities under the Higher Education Act to continue loan forgiveness before payments resume after a pause. “We still have the power to cancel and must use it, or we’re looking at an economic crisis for millions of people,” she said on Twitter.

About 53% of Americans supported Biden’s original student loan forgiveness program, while 81% of Democrats did so, a Reuters/Ipsos poll showed this year.

Democrats want voters to see Biden fighting for student debt relief ahead of his re-election bid in 2024, hoping conservative rulings from the court on debt relief and affirmative action or race-conscious college admission considerations would galvanize them in the same way the court’s ruling to strike down abortion rights did in 2022.

The White House made clear it would be putting blame on Republicans for stymieing student-loan relief efforts. Biden blasted Republican elected officials for supporting billions of dollars in pandemic-related loans to businesses that were eventually forgiven but not supporting student debt relief.

Education Secretary Miguel Cardona, in a briefing with reporters, listed a handful of Republican lawmakers, whom he named, who collectively had had millions of dollars in pandemic-related loans forgiven.

Republicans argued that Biden’s initial student-loan relief plan was unconstitutional and unfair.

“Biden’s student loan bailout unfairly punished Americans who already paid off their loans, saved for college, or made a different career choice,” Republican National Committee (RNC) Chairwoman Ronna McDaniel said in a statement. “Americans saw right through this desperate vote grab, and we are thankful that the Supreme Court did as well.”

Reuters

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