EDUCATION + SCHOOLS

Biden offers alternative student debt relief plan

Jun 30, 2023, 3:15 PM | Updated: 4:27 pm

FILE - President Joe Biden speaks about the student debt relief portal beta test in the South Court...

FILE - President Joe Biden speaks about the student debt relief portal beta test in the South Court Auditorium on the White House complex in Washington, Oct. 17, 2022. A sharply divided Supreme Court has ruled that the Biden administration overstepped its authority in trying to cancel or reduce student loans for millions of Americans. Conservative justices were in the majority in Friday’s 6-3 decision that effectively killed the $400 billion plan that President Joe Biden announced last year. (AP Photo/Susan Walsh, File)
Credit: ASSOCIATED PRESS

(AP Photo/Susan Walsh, File)

WASHINGTON (AP) — President Joe Biden is offering an alternative student debt plan designed to ease borrowers’ threat of default if they fall behind on their payments, after the Supreme Court struck down his original initiative.

Biden on Friday blamed Republican opposition for triggering the Supreme Court’s ruling and slammed the decision as wrong.


 The president said he will work under the authority of the Higher Education Act to begin a new program that would begin loan repayment but remove the immediate threat of default. He said the plan would take longer but provide relief to millions of borrowers.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

WASHINGTON (AP) — The Biden administration is moving forward on a new student debt relief plan after the Supreme Court struck down his original initiative to provide relief to 43 million borrowers.

President Joe Biden insisted Friday that “this fight is not over” and blamed Republican opposition for the demise of his original plan.

The plan would have helped the president keep a campaign promise and is seen as key to helping win over young voters in next year’s presidential race — a vital demographic to his reelection bid.

The White House said Biden’s chief of staff, Jeff Zients, has been holding meetings about once a week to prepare for the Supreme Court ruling, and administration officials also have met and spoken with dozens of advocates and allies in the congressional community,, so they would have a fully formed response once the court had ruled.

Biden was briefed after Friday’s ruling and met with senior staff to push ahead with an alternative plan given its implications, the White House said, without providing any details.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

WASHINGTON (AP) — President Joe Biden insisted Friday that “this fight is not over” after the Supreme Court struck down his $400 billion student loan forgiveness plan. Biden blamed Republicans’ opposition, aiming to direct the ire of millions of borrowers toward them rather than his own party in next year’s elections.

The president planned an afternoon address to lay out a series of actions to provide continued relief to 43 million student loan borrowers, and in the meantime tried to stay on the political offensive against the GOP.

“The hypocrisy of Republican elected officials is stunning,” Biden said in a statement. “They had no problem with billions in pandemic-related loans to businesses – including hundreds of thousands and in some cases millions of dollars for their own businesses. And those loans were forgiven. But when it came to providing relief to millions of hard-working Americans, they did everything in their power to stop it.”

Electoral consequences aside, progressive Democrats in Congress and activists clamored for the White House to offer a swift and substantial response to the court’s decision. Natalia Abrams, president and founder of the Student Debt Crisis Center, said the responsibility falls “squarely” on Biden’s shoulders.

“The president possesses the power, and must summon the will, to secure the essential relief that families across the nation desperately need,” Abrams said in a statement.

Massachusetts Democratic Sen. Elizabeth Warren, one of her party’s leading voices on the left, said, “The president has more tools to cancel student debt — and he must use them.”

The GOP has long argued that repaying the student loans is a fairness issue, and they celebrated the ruling. Betsy DeVos, who served as secretary of education under President Donald Trump, called Biden’s original plan “deeply unfair to the majority of Americans who don’t have student loans.”

Republicans now seeking their party’s 2024 presidential nomination lined up to applaud the ruling, with former Vice President Mike Pence saying he was “pleased that the court struck down the radical left’s effort to use the money of taxpayers who played by the rules and repaid their debts in order to cancel the debt of bankers and lawyers in New York, San Francisco, and Washington.”

Former U.S. ambassador to the United Nation’s Nikki Haley said the Supreme Court was “right to throw out Joe Biden’s power grab.”

Trying to place the onus for ending the plan on the GOP could allow Biden’s reelection campaign to keep the issue of students loans as one of strength in the short term. But that may ultimately offer little solace to 43 million Americans who will now could have to start again repaying their student loans.

“We do not want to go into excruciating debt for our entire lives to enhance our education,” Voters of Tomorrow, a Gen Z-led organization that promotes the power of young Americans, said in a statement.

The White House’s efforts to block payments were an attempt to keep a Biden 2020 campaign promise to wipe out student loan debt that was especially popular with young voters and progressives. Both will be vital to Biden in next year’s presidential race — but may be less energized about supporting him after the high court’s decision.

Wisdom Cole, the national director of the NAACP Youth & College Division, said Black Americans helped put Biden in the White House, so there’s an obligation for him to “finish the job” with his pledges to provide relief for borrowers around the country. He suggested a lack of action could see Biden face a backlash next year with key demographics — specifically young voters and Black voters.

“It’s going to have a huge impact on the next election. This was a key point. This was a key policy priority,” Cole said, adding, “If we don’t do this, we continue the cycle of seeing our elected leaders make promises and not follow through.”

A May poll from The Associated Press-NORC Center for Public Affairs Research found that 43% of U.S. adults approve of how Biden sought to handle student debt, similar to his approval rating overall of 40% in the same poll.

The poll suggested that Biden gets credit for his handling of the issue among young adults in particular. Fifty-three percent of adults under age 30 said they approved of Biden’s handling of student debt, compared with only 36% who approved of his job performance overall.

Cole suggested that the White House employ the Higher Education Act of 1965 as a legal foundation for debt relief.

“Failure is not an option for us,” Cole said, adding, “They have to ensure that they’ll use every legal authority to give borrowers relief from crushing student loan debt.”

The high court’s decision comes as loan payments — which have been on hold since the start of the coronavirus pandemic three years ago — were already set to resume in the fall.

Jed Shugerman, a law professor at Fordham University, said it would be essentially impossible to provide immediate debt relief before payments start again.

“That’s why we call it administrative law rather than fiat,” Shugerman said, noting that the rulemaking process requires “crossing t’s and dotting i’s and giving real reasons for policies.”

The situation has some political overlap with a COVID pandemic-era ban on nationwide evictions, which expired in 2021 with the Biden administration opposing the move but arguing that its hands were tied because the Supreme Court refused to extend it — despite the protests of progressive Democrats and housing activists. But the impact of the student loan program could be far wider.

Friday’s decision wasn’t unexpected given the court’s reactions when it heard arguments in the case in February. Since then, the White House has faced pressure from activists and progressive Democrats to formulate a backup plan that would provide relief to borrowers — but spent months publicly refusing to publicly discuss a Plan B.

The pressure was only intensifying now.

“President Biden must keep the promise he made to cancel student debt,” said U.S. Rep. Cori Bush, a Missouri Democrat who was among the most vocal defenders of the eviction moratorium. “Inaction is not an option.”

___

Associated Press writers Chris Megerian and Collin Binkley contributed to this report.

 

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Biden offers alternative student debt relief plan