WASHINGTON − President Joe Biden plans to announce “new actions to protect student loan borrowers,” the White House said Friday, after the Supreme Court overturned his signature program to eliminate up to $20,000 in student loan debt for millions of Americans.
The court’s 6-3 decision dashed the hopes of 26 million people who applied for student loan cancellation since Biden took the action last August, putting pressure on the Biden to find other ways for debt relief.
“While we strongly disagree with the court, we prepared for this scenario. The president will have more to say today,” a White House official who spoke on the condition of anonymity said.
In his remarks Friday, Biden will make clear that “he’s not done fighting yet,” the official said, and stress to borrowers and their families that “Republicans are responsible for denying them the relief that President Biden has been fighting to get to them.”
For months, the White House publicly resisted calls from liberal constituency groups to come up with a Plan B for student loan debt in anticipation of the conservative-majority court striking down Biden’s action on student loans.
Even when a majority of Supreme Court justices expressed deep skepticism over Biden’s plan during oral arguments in March and − signaling they would rule against the president − the White House refused to discuss a potential alternative.
The Supreme Court ruled that Biden overstepped his executive authority when he bypassed Congress to wipe out $400 billion in student loan debt by citing a provision in the 2003 HEROES Act that allows the education secretary to “waive” or “modify” student loans during a national emergency.
What else could Biden do to forgive student loan debt?
Biden’s action sought to forgive $10,000 for all borrowers federal student loan borrowers and up to $20,000 in debt relief for low-income Pell Grant recipients. The debt cancelation was only available to borrowers with annual incomes less than $125,000 or from households earning $250,000 or less.
The sure-fire way legally to achieve the same goal – forgiving up to $20,000 in student loan debt for low- and middle-income households – would be for Congress to act.
But Biden lacks the votes for legislative action.
Both bodies of Congress − including the Democratic-controlled Senate − voted to repeal Biden’s student loan forgiveness action, forcing the veto pen of Biden to keep his plan alive before the court’s decision.
Some legal experts have argued Biden could propose a narrower plan that still invokes the HEROES Act, although it likely would have a significantly smaller reach.
Others have argued Biden could turn to the Higher Education Act of 1965, which Biden and past administrations have cited to provide student loan debt relief to certain categories of borrowers such asteachers and the disabled.
The White House has touted its previous efforts to cancel debt through the Public Service Loan Forgiveness program. However, the Biden has only used this method to provide relief to borrowers working in the public sector.
Instead, Biden might have to revert to smaller steps.
For example, alongside the debt forgiveness plan, Biden introduced a new program designed to more directly tie borrowers’ monthly loan payments to their income. The plan, which is still going through the Education Department’s regulatory process, would reduce some borrowers’ payments to 5% of their discretionary income.
Reach Joey Garrison on Twitter @joeygarrison.
