Here's Joe Biden's Student Debt Forgiveness Backup Plan ... And His Other Debt Relief Plans, Too!

Supreme Court handed Democrats another 2024 campaign issue.

Joe Biden went on TV yesterday to say that he thinks the Supreme Court got it wrong when it nuked his plan for up to $20,000 in student loan forgiveness in a very dubious 6-3 ruling. He was obviously pretty cheesed about the decision, especially the fact that so may Republicans are just fine with doling out corporate loans, tax cuts, and subsidies but suddenly care very much about the national debt if a struggling family gets a little help from the government, to give them some breathing room. But it wasn't just condemnation of the Court and the greedheads; Biden also highlighted what he intends to do now to help families with student debt.

Previously!

 Supreme Court: You Owe Your Soul To The Student Debt Store 

 Joe Biden's Here With A Few Choice Words About The Supreme Court's Student Debt Decision 

 Here's the video; we have so much to get to in this post that we're only barely going to mention the assholish question at the end from Jacqui Heinrich — of Fox News, of course — who accused Biden of giving "false hope" to millions with his debt forgiveness plan, because presumably he should have known in advance the Supremes would act lawlessly. Kudos to Joe for not letting that foolishness stand, and for pointing out that "Republicans snatched away the hope" borrowers had been given by the plan. Also, that brief flash of anger in his eyes before his fairly measured reply. I like this guy.

 youtu.be 

Biden said that since the Court ruled — stupidly, we'll add — that the loan forgiveness plan wasn't authorized by the 2003 HEROES Act, his administration would pursue a new path to loan forgiveness, using the Education Department's authority under the 1965 Higher Education Act (HEA), which established low-interest federal student loans in the first place. It was signed into law by Lyndon Johnson and has been reauthorized nine times, with revisions to update it, like the establishment of Pell grants in 1972.

The law authorizes the secretary of Education to "compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption," and that clause was what Democrats like Elizabeth Warren and Chuck Schumer had in mind when they called on Biden to forgive student debt. Real policy nerds can dive into this 7-page analysis that Sen. Warren requested in 2020 from Harvard Law School's Legal Service Center, which concludes that the HEA gives the secretary the power to grant "broad or categorical debt cancellation."

Biden said he had already directed Education Secretary Miguel Cardona to start the process of using the HEA to bring back debt forgiveness; because of the lengthy federal rulemaking process, it will likely take months to reach a final rule, which of course would then be subject to challenge in the same Court that decided the HEROES Act's authorization for the secretary to issue “waivers and modifications” of student loans in national emergencies wasn't good enough. To be sure, the HEA language is more expansive, but we suspect that still might not be enough for the Roberts Court because it doesn't also say "including cancelling up to $10,000 of debt for most borrowers, or $20,000 for those who received Pell grants. P.S.: Alito's a tool."

In addition to the second try at loan forgiveness, Biden also said that when the pandemic loan payback and interest pause ends on October 1 and loan payments are again due, the Education Department will allow a 12-month "ramp up" period through September 30, 2024. That's to make sure that

financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.

In addition, Biden called attention to the Education Department's proposed revisions to the Income Driven Repayment (IDR) plan for student loans, which were announced in January and are still moving through the federal rulemaking process. Once that revision goes into effect, many borrowers in the most popular income-based repayment plan will qualify for far lower monthly payments, and many financially challenged borrowers will actually see their monthly payments go to zero. At the end of 20 to 25 years, depending on the type of loan, their remaining debt will be discharged. Folks who initially borrowed $12,000 or less will have their loans forgiven after 10 years of payments. More on that program here .

More! Here!

 Did Joe Biden Just Fix Student Loan Debt Going Forward? Mayyyyybe! 

 I Got My Student Loans Ready For Joe Biden's Big Income-Based Forgive-A-Thon And You Should Too 

Also too, while Biden didn't mention it in his remarks yesterday, keep in mind that, in another administrative action the Education Department announced last year, millions of borrowers in IDR plans of all sorts will qualify for a special, one-time adjustment that could dramatically reduce the number of payments they need to get their loans discharged. More on that here; I still plan on doing an update to that next week, too.

Finally, Biden also touted other measures his administration has taken, like increasing the size of Pell Grants; fixing processing roadblocks that had kept participants in the Public Service Loan Forgiveness program from actually getting their loans forgiven (Biden too-graciously didn't name Trump's Ed Secretary, Betsy DeVos, who made the problem worse ); and cancelling more than $66 billion in student debt for those eligible public service workers, as well as for students who were defrauded by the grifty for-profit colleges that were DeVos's very special darlings.

The more I look at how the Education Department is fixing what's been wrong with student loans, the more impressed I am.

Now, if we could just tackle the many factors that have made college so expensive in the first place — first among them states' abandonment of adequate tax support — we'd really have something to crow about.

[ CBS News / NYT / Harvard Law School / Income Driven Repayment at Studentaid.gov / One-Time IDR Adjustment at Studentaid.gov]

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