President Joe Biden said he would pursue a new path for student loan forgiveness using the Department of Education, and unveiled a new program aimed at easing repayment for borrowers, after the Supreme Court struck down his student debt forgiveness program Friday.
President Joe Biden called the Supreme Court's decision to strike down his student debt relief ... [+]
Biden said he was “discouraged” and “angry” after the Supreme Court struck down his student loan forgiveness plan in a 6-3 vote, ending a months-long legal battle over the plan, which would have forgiven $10,000 in federal student loan debt for borrowers who earn less than $125,000, and up to $20,000 for borrowers who received the Pell Grant.
In a speech at the White House Friday afternoon, Biden said his administration will pursue another attempt at forgiveness through the so-called Higher Education Act, using the authority of the Department of Education rather than presidential authority — a move that Democrats have called on the White House to execute for months in the face of pressure from Republicans.
While details on the new plan were scarce, the Biden administration will also create a “temporary 12-month on-ramp repayment program” aimed at easing pressure on borrowers who were protected by a three-year Covid-era student loan pause—that pause is set to expire at the end of the summer, meaning borrowers will be required to make debt payments in October.
Under the program, Biden said the Department of Education will not refer borrowers who miss monthly payments to credit agencies for 12 months, removing the threat of default, though payments will still be due and interest will accrue.
The White House said in a statement the Department of Education also finalized a repayment option that would eliminate the need for monthly payments from many borrowers.
Biden called the court’s decision “disappointing” in a statement on Friday, claiming nearly 90% of the relief from his student loan forgiveness plan would have benefitted students making under $75,000 a year, while vowing to “continue to work to bring the promise of higher education to every American.” The court ruled Biden overstepped his presidential authority in making the plan, though administration had argued the president had the authority to create the forgiveness plan under the HEROES Act, arguing the Covid-19 pandemic constituted a national emergency giving the Secretary of Education permission to cancel student debt.
Supreme Court Rejects Student Loan Forgiveness—Here’s What To Know Before Payments Restart This Fall (Forbes)
Supreme Court Strikes Down Biden’s Student Loan Forgiveness (Forbes)