Biden Details Student Loan ‘Plan B’


“How about all those hardworking people who grew up and had no opportunity to go to college? I get it,” he said. “That’s why a big part of my economic agenda is invested in all Americans, whether you attend college or not.”

Young voters were crucial to Biden’s victory in 2020, when he vowed to cancel student loans as a candidate. In Wisconsin, Biden met with borrowers who have received relief through his previous initiatives, according to White House press secretary Karine Jean-Pierre.

Senior administration officials, who previewed the details, said relief for borrowers with accrued interest could occur as soon as this fall. However, the timeline is unclear for when all potential beneficiaries could see cancellation.

Legal Challenges

The Higher Education Action — the law the president is using to pursue relief — requires that actions take effect in July of the following year after a final rule is introduced, unless there are special circumstances. The administration has pursued other measures on a fast-tracked basis, including the so-called “SAVE” repayment program.

Kansas Attorney General Kris Kobach, who led 11 Republican-controlled states to sue the administration over past forgiveness moves, questioned the legality of the current proposal.

“If any of these schemes were a plausible reading of federal law, then the Biden administration would have done that in the first place and forgiven all of the selected loans in one step,” Kobach said in a statement.

So far under Biden, the White House has incrementally forgiven $146 billion in loans for 4 million people. The majority of that relief came in the months following the Supreme Court’s decision to throw out the president’s 2022 attempt to pursue up to $20,000 in debt cancellation for an estimated 40 million borrowers.

The court’s conservative majority ruled that such widespread relief could only be authorized by Congress. The president vowed to pursue a “Plan B” the same day it was struck down in court.

The final rule must first go through a comment period, which could last anywhere from 30 to 60 days. Some lawyers have challenged a 30-day comment period for previous actions, arguing such a timeframe is too short for major regulations.

Sheng Li, an attorney with New Civil Liberties Alliance also challenging the administration on other student-debt relief actions, says the interest-related measures have less legal footing than Biden’s initial proposal for widespread debt cancellation.

“These interest payments are not optional, and can’t be waived or canceled in any way,” Li said in an interview. “I just can’t imagine this new program really passing muster if given judicial scrutiny.”

(Credit: Shutterstock)

Copyright 2024 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *