President Joe Biden’s ambitious plan to provide relief for student loan has suffered a setback with the Supreme Court ruling against the proposal. The decision not only dealt a blow to President Biden but also disappointed millions of individuals who were counting on student loan forgiveness. The administration is now forced to shift to Plan B, but the process of finding an alternative solution is expected to be time-consuming.
The Debt-Relief Plan
When President Biden announced his comprehensive student loan debt-relief plan last August, he painted a vivid picture of liberation, stating, “People can start to finally crawl out from under that mountain of debt.” However, nearly a year later, the Supreme Court ruled 6-3 that the plan could not proceed. This ruling has left President Biden and the millions of hopeful borrowers who had reoriented their lives and spending plans around the expectation of loan forgiveness in a state of disappointment. Adam Harris, a higher education reporter for The Atlantic, emphasized the logistical challenges borrowers will face with the restart of student loan payments.
President Biden’s initial debt-relief plan relied on the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act). This legislation grants the secretary of education the authority to waive or modify federal student loan provisions during national emergencies. However, the Court’s recent ruling determined that the 2003 law did not authorize President Biden to cancel the debt. Chief Justice Roberts invoked the “major-questions doctrine,” which stipulates that Congress must explicitly authorize action on matters of significant economic and political importance. In a notable dissent, Justice Elena Kagan raised constitutional concerns, arguing that the Court was intruding upon a contested public policy issue that should be handled by the politically accountable branches of government.
Biden’s Alternative Plan
In response to the setback, the Biden administration swiftly shifted to Plan B. The Department of Education announced that it had initiated a new rule-making process to explore alternative paths for debt relief. This includes leveraging the Higher Education Act of 1965, which grants the secretary of education the authority to compromise, waive, or release various rights and claims. The administration also introduced other changes to alleviate the burden on borrowers, such as offering more affordable repayment plans and implementing a year-long “on-ramp” to repayment.
However, the transition to the Higher Education Act presents its own challenges. The negotiated rule-making process is anticipated to be lengthy, potentially lasting several months or even up to 18 months. Adam Harris explained that the Biden administration initially turned to the HEROES Act due to its perceived authority to provide debt relief and the desire for a faster process. However, a debt-relief plan based on the Higher Education Act may face similar legal obstacles. Legal expert Jed Shugerman expressed skepticism, suggesting that such a plan would likely be met with resistance in the Supreme Court.
The Biden administration remains determined to find a viable solution for student debt relief. While the transition to Plan B offers some hope, the road ahead is fraught with legal uncertainties and potential challenges. The ongoing pursuit of a resolution underscores the complexity and importance of addressing the pressing issue of student loan debt.
