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The Hill
The Hill
30 Jun 2023
Lexi Lonas and Alex Gangitano


NextImg:Biden offers new routes to tackle student debt after Supreme Court decision

President Biden on Friday announced new actions to offer student loan borrowers some forgiveness, reintroducing his forgiveness plan grounded in the Higher Education Act (HEA).

Using the HEA to provide student debt relief has been pushed by student loan advocates and top Democrats for years. Under the HEA, advocates argue it allows the education secretary to “compromise, waive or release” students loans. This path will require a public comment and notice period before it could go into effect. 

“We need to find a new way, and we’re moving as fast as we can,” he said in remarks at the White House on Friday afternoon.

The administration had tied the student debt relief plan — struck down by the Supreme Court — to the national emergency established during the COVID-19 public health crisis, citing the Higher Education Relief Opportunities for Students (HEROES) Act. Chief Justice John Roberts wrote in the court’s majority opinion, issued Friday morning, that the HEROES Act does not grant the authority. 

The president also announced they will launch an on-ramp repayment program for people who miss payments. It is set to remove the threat of default or harm to credits because the Department of Education won’t refer borrowers who miss payments to credit agencies for 12 months.

“If you can pay your monthly bills you should, but if you cannot, if you miss payments, this on-ramp temporarily removes the threat of default or having your credit harmed,” Biden said.

Student debt payments have been paused since the pandemic, but in a deal with Speaker of the House Kevin McCarthy (R-Calif.) to secure a debt-ceiling agreement, Biden set in stone the resumption of repayments beginning in October. Interest will begin to accrue again at the beginning of September. 

The Supreme Court decision on Friday stopped more than 40 million borrowers from receiving loan forgiveness and delivered a major defeat to one of the president’s key campaign promises. The decision limits Biden’s options to deliver on that promise.

The program, announced in August, would have canceled up to $20,000 in loans for Pell Grant recipients and $10,000 for other borrowers, if the individual’s income is less than $125,000.

Soon after the Supreme Court struck down the president’s student loan forgiveness plan, the White House said it was prepared and that Biden had a new action to roll out.

The announcement comes after the White House refused to talk about a “Plan B” for months while student debt relief was held up in the court system.