(Trends Wide) –– US President Joe Biden announced a “new path” for student loan debt relief on Friday, after the Supreme Court ruled against his forgiveness program that would have benefited millions of Americans.
The new plan would help as many Americans “as possible,” according to the president. I will never stop fighting for you. We will use all the tools at our disposal to provide you with the student debt relief you need and help you achieve your dreams. This is good for the economy. It’s good for the country,” Biden said from the White House hours after the court ruling.
However, the president clarified that implementing this new strategy “will take more time” than the initial student debt forgiveness program. “We are not going to waste time,” he assured, “we are moving with it. It will take more time, but we will do it immediately.”
He also added that the new plan adheres to the recent decision of the Supreme Court, since “it will be based on a different law, the Higher Education Law of 1965.” In this sense, it will allow the Secretary of Education, Miguel Cardona, who was with Biden during the declaration, “to commit, forgive or release loans under certain circumstances.”
According to Biden, this path is legally sound and the best option for his administration. It’s also a path that progressive lawmakers have encouraged the president and his White House to pursue.
The first details about the new plan
Student debt relief activists demonstrate at the US Supreme Court on June 30, 2023 in Washington. (Credit: Kevin Dietsch/Getty Images)
The proposal also includes an alternative for the resumption of payments. Biden explained that his administration will create a 12-month “temporary payment program” that is intended to help borrowers who must make difficult decisions to meet their student debt obligations when collections resume in October.
Rather than let people fall into financial ruin when they default on their payments, Biden said the temporary alternative will remove the threat of default or a borrower’s credit rating being damaged for years to come.
“This is not the same as pausing student loan payments,” Biden clarified. “Monthly payments will be due,” charges will go out, and interest will begin to accrue.
“If they can pay their monthly bills, they should,” the president continued. But if they can’t, the alternative will help them avoid financial ruin.
The Department of Education will not refer borrowers with late payments to the credit bureaus for 12 months “to give them a chance to catch up,” Biden said.
The president also announced that his administration will lower the levels for the income-based repayment plan from 10% to 5% of the borrower’s disposable income.
The decision of the Supreme Court
(Credit: Kevin Dietsch/Getty Images)
The Supreme Court ruled against student loan forgiveness and invalidated a program intended to provide up to $20,000 in relief to millions of borrowers struggling with outstanding debt.
The decision was 6-3 with Chief Justice John Roberts writing for the conservative majority.
Republican-led states and conservatives who question the program say it amounts to an illegal attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.
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Roberts said the Biden administration and the Secretary of Education rewrote the law.
“The Secretary’s Comprehensive Debt Cancellation Plan cannot fairly be called a waiver: it not only nullifies existing provisions, but dramatically increases and expands them,” Roberts wrote. “As broad as the meaning of ‘waive or amend,’ that language cannot authorize the kind of comprehensive rewriting of the statute that has taken place here.”
The White House tried to use the authority of the HEROES Act to forgive the debt.
Roberts said the government needed direct authorization from Congress.
“The issue here is not whether something should be done, it’s who has the authority to do it.”
Liberal dissidents said the majority is basically making political decisions.
“The Court acts as if it were an arbiter of policy and policy disputes, rather than cases and controversies,” Justice Elena Kagan wrote.
He accused the court of substituting “once again for Congress and the Executive Branch, and the hundreds of millions of people they represent, in making this nation’s most important and controversial political decisions.”
criticism of republicans
In his brief remarks, Biden also criticized Republicans and “special interests” for “snatching” debt relief “out of the hands of millions of Americans.”
“You know these Republican officials just couldn’t stomach the idea of providing relief to working and middle-class Americans,” Biden said, accusing them of “stunning” hypocrisy.
“I think the court misinterpreted the Constitution,” Biden added later.
