President Biden announced he would try a new legal avenue to provide student-loan borrowers with relief after the Supreme Court struck down his initial plan to forgive billions of dollars in debt, undoing one of his signature initiatives.
"Today's decision has closed one path. Now we're going to pursue another. I'm never going to stop fighting for you. We'll use every tool at our disposal to get you the student debt relief you need and reach your dreams," Biden said Friday at the White House.
The president said he would begin a new process to provide relief under the Higher Education Act and would also create a 12-month "on-ramp repayment program" that would help borrowers reduce the threat of default.
"I know there are millions of Americans, millions of Americans in this country who feel disappointed and discouraged or even a little bit angry about the court's decision today on student debt. And I must admit, I do, too," Biden said.
Education Secretary Miguel Cardona stressed that the so-called on-ramp "is not a loan pause," adding, "We're encouraging payments to be made and interest will be accruing in the process."
Friday's decision was the latest blow from the conservative majority Supreme Court to Biden and progressive allies. The justices, in a 6-3 vote, sided with six Republican-led states that sued to challenge the program as exceeding the president's authority.
The ruling nixes a centerpiece of Biden's agenda — one he campaigned on in 2020. The debt-relief program is broadly popular with progressives, young people and Black voters, and was seen as an unabashed attempt to woo those key voting blocs. Those voters helped Biden win the White House and are crucial to securing a second term with polls showing their support for the president has waned.
The broader impact on the economy will come this summer, when more than 40 million Americans resume student-loan payments, following a three-year pause aimed at alleviating the weight of almost $1.8 trillion in student debt.
Biden argued Republicans are responsible for denying student-loan relief, even as they supported the Paycheck Protection Program to help businesses weather the COVID-19 pandemic.
"These Republican officials just couldn't bear the thought of providing relief for working-class, middle-class Americans," he said. "Some of the same elected Republicans, members of Congress, who strongly opposed debt relief for students got hundreds of thousands of dollars themselves."
"The hypocrisy is stunning," Biden added.
Republicans blasted the size and scope of Biden's plan to forgive as much as $20,000 in federal loans for borrowers making less than $125,000 per year and $250,000 for households. The Congressional Budget Office estimated the cancellation would cost about $400 billion over 30 years.
Republican National Committee Chairwoman Ronna McDaniel said in a statement that Biden's plan "unfairly punished Americans who already paid off their loans, saved for college or made a different career choice."
"Americans saw right through this desperate vote grab, and we are thankful that the Supreme Court did as well," McDaniel added.
Bloomberg News first reported that officials were being asked to reintroduce the plan under a different legal rationale using the Higher Education Act of 1965, which gives the Education secretary broad authority to manage the federal student-loan portfolio.
But the White House previously dismissed suggestions of a "Plan B."
Dozens of advocates marched in Washington on Friday in opposition to the court's ruling and to push the president to use other tools to cancel debt, warning that doing so would be critical to turning out supporters for his reelection bid.
Legal watchers had expected the court to strike down the program after the conservative majority reacted skeptically during oral arguments in February to the administration's citing of the COVID-19 pandemic and the use of a 2003 law known as the Heroes Act to enact the debt relief.
It's unclear if the president's new approach will stand up in courts, but Biden expressed confidence.
"This new path is legally sound. It's going to take longer, and in my view is the best path that remains to providing as many borrowers as possible with debt relief," he said. "We're not going to waste any time on this. We're getting moving on it. It's going to take longer, but we're getting at it right away."
— With assistance from Jordan Fabian
