President Joe Biden announced on Friday that he will revisit his student debt relief plan, this time by utilizing the Higher Education Act. This comes after the U.S. Supreme Court rejected his initial proposal to forgive up to $20,000 per borrower.
Speaking from the White House, Biden expressed his disagreement with the court’s decision, stating, “I believe the court’s decision was a mistake, it was wrong. We need to find a new way and we’re moving as fast as we can.”
In a 6-3 ruling, the Supreme Court overturned Biden’s plan to cancel student loan debt for approximately 40 million Americans. This plan would have forgiven over $400 billion in student loans, making it one of the most expensive executive actions in history.
Biden drew attention to the approval of the Paycheck Protection Program during the previous administration, which had a cost estimate of $760 billion. He criticized the apparent hypocrisy, saying, “You can’t help a family making $75,000 a year but you can help a billionaire and have your debt forgiven? My plan would not only have been life changing for millions of Americans, it would have been good for the American economy.”
Biden also announced that he has instructed the U.S. Department of Education to implement a 12-month “on-ramp” period. This would provide relief for borrowers who are struggling to resume loan payments after the three-year pause, forgiving initial missed payments during this period. It is important to note that this is not an extension of the payment pause, as payments will still be due and interest will accrue. However, the Department of Education will not report missed payments to credit agencies for the first year.
Last year, President Biden unveiled his plan to cancel $10,000 in student debt for borrowers earning less than $125,000, or married couples earning under $250,000. Under the proposal, Pell grant recipients were eligible for up to $20,000 in forgiveness.
The Supreme Court’s ruling on Friday resets the situation for millions of student loan borrowers as the payment pause, implemented at the onset of the Covid-19 pandemic, comes to an end in October. During this pause, borrowers were not required to make payments or accumulate interest on their loans.
Biden criticized the Supreme Court’s decision, referring to it as a mistake.
“I believe the court misinterpreted the Constitution,” Biden stated.
This marks the second time in two days that the president has voiced his criticism of the Supreme Court, following his comments on Thursday regarding the court’s rejection of affirmative action in college admissions. When asked if he considered it a “rogue court,” Biden responded to reporters, “It’s not a normal court.”
During an appearance on MSNBC’s “Deadline: White House” later that Thursday, Biden expressed his view that the current Supreme Court has “done more to unravel basic rights and decisions than any court in recent history.”
“I think that some on the court are beginning to realize that their legitimacy is being questioned in ways that it hasn’t been questioned in the past,” the president added.
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