Will Biden's plan B for student loans work?

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A photo illustration shows President Biden erasing part of a drawing of the Supreme Court on a blackboard.
Illustration: Yahoo News; photos: Anna Moneymaker/Getty Images, Getty Images

What’s happening

Within hours of the Supreme Court striking down his student debt forgiveness plan, President Biden announced a “new path” he will use in an attempt to turn his promise to provide debt relief to millions of Americans into a reality.

Last summer, the president unveiled a plan that would have erased more than $400 billion in student loan debt — a program that would have benefitted an estimated 27 million borrowers. But on Friday, the court’s six conservative justices ruled that the law the White House had built its scheme around, a statute known as the HEROES Act, did not grant the executive branch the authority to take such sweeping action without clear sign off from Congress.

Biden’s new approach will instead rely on provisions in a different law called the Higher Education Act. That law, which essentially created the modern system of college funding when it passed in 1965, grants the secretary of education the power to “compromise, waive or release” federal student loans. The Biden administration has already used the HEA to forgive loans held by students who were exploited by for-profit universities or are unable to repay their loans because of a permanent disability.

Biden insisted that the new strategy is “legally sound” but cautioned that it will “take longer” to implement than the original plan because it will have to go through a lengthy federal rulemaking process. His announcement was also light on details, most notably on whether everyone who was eligible for forgiveness under the original proposal would qualify for the new plan.

In addition to a new approach to forgiveness, Biden announced an “on-ramp” for borrowers who may struggle to keep up with their loan payments when they resume. The Department of Education on Friday also finalized more generous income-based repayment rules that will significantly lower the monthly payments of low-income borrowers and allow them to have their remaining balances cleared after 10 years. Those new steps come on top of the expanded Public Service Loan Forgiveness program, which Biden has used to forgive more than $42 billion in debt held by people working in public service jobs like education and health care.

Why there’s debate

Most Democrats praised Biden for wasting no time in launching a second attempt at widespread loan forgiveness, but there were many questions — from supporters and critics alike — about whether this new approach would also fail.

Some debt-relief advocates argue that an approach centered on the HEA is on much firmer legal ground than the previous plan, which they believe will allow it to survive scrutiny from the Supreme Court. Others are hopeful that the long rulemaking process will allow potential pitfalls of the program to be discovered and resolved before the final proposal is put before the courts.

But skeptics from both sides of the political spectrum say Biden’s second attempt at debt relief is doomed to end up just like the first. Conservative pundits argue that simply repackaging a failed plan does nothing to address the fact that the law just doesn’t provide Biden with such sweeping authority over student loans. Liberals, on the other hand, say the conservative justices will find any excuse to reject a Democratic priority they dislike, whatever the legal reasoning behind it.

What’s next

Regardless of what happens with Biden’s new plan, the three-year pause on federal student loan payments and interest will end in the coming months.


The president has an obligation to keep trying

“Now that the court has struck down Biden’s first policy stab, Biden can, and must, swiftly exercise other legal authorities to automatically cancel debt. The court’s ruling is not the death of debt cancellation — it’s merely a blockade on one channel to get there.” — Eleni Schirmer, Guardian

The court will strike down any debt relief plan, regardless of its legal validity

“The bottom line here is that the conservative majority is going to keep striking down liberal executive branch initiatives it doesn’t like — text or context or no text.” — Noah Feldman, Bloomberg

The Supreme Court will reject Biden’s new power grab as well

“There’s seldom education in the second kick of a mule … but the courts will have every reason to try over Mr. Biden’s next illegal loan cancellation.” — Editorial, Wall Street Journal

If Biden had relied on the HEA from the beginning, forgiveness may have already happened

“As a matter of principle, the Biden administration should give its real reasons for a good policy, and it should do so under a statute that supports those reasons. Such a statute may exist in plain sight: the Higher Education Act of 1965.” — Jed Shugerman, Atlantic

The income-based repayment plan has a chance to be just as transformative as debt relief

“Measures like these work in smaller, less spectacular amounts, and can seem like mere bureaucratic tinkering at the margins, but the relief they can provide over time will soon add up to far more than a single-shot program.” — Kevin T. Dugan, New York

Biden might actually be successful if he could curb his ambition a little

“Either Biden complies with the law, in which case he’ll be limited to making minor tweaks that he’ll tout as student-loan relief, or he’ll go full-speed ahead with a program of similar scale to his original program, in which case he’ll be smacked down by the Supreme Court again.” — Philip Klein, National Review

Congress is still the only branch that has the power to grant significant debt relief

“Congress could pass a law that does exactly what Biden’s executive order pretended to do. … If their bill really is that popular, either they can pressure enough Republicans to flip, or they can defeat enough Republicans for opposing it and thus take back Congress and immediately pass their bill in January 2025.” — Timothy P. Carney, Washington Examiner

Biden’s refusal to take bold, immediate action will doom his second plan too

“The lengthy rulemaking process … will give opponents a chance to tee up a similar legal case as was decided today.” — David Dayen, American Prospect executive editor

Biden should stop chasing headlines and focus on practical ways to help people afford education

“Better for Mr. Biden, and everyone else, to focus on proposals that could make a meaningful dent in the cost of higher education. … Structural reform should be accomplished urgently — and in the clearest statutory language Congress can write.” — Editorial, Washington Post

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