The Commercial Appeal
Pressure on Biden rises for student debt Plan B
Justices’ concerns could mean program in peril
WASHINGTON – President Joe Biden faces growing pressure to develop an alternative plan to cancel student loan debt for millions of Americans after the executive action he took last year ran into a buzz saw from a majority of Supreme Court justices Feb. 28.
The court’s conservative majority expressed deep skepticism over Biden’s plan to wipe out $400 billion in student loan debt, suggesting the president overstepped his authority during oral arguments in a closely watched challenge of Biden’s program.
Some liberal constituency groups and student loan advocates want Biden to work on a backup plan to provide sweeping debt relief given the strong possibility the high court strikes down Biden’s plan.
But publicly, the White House won’t even entertain the idea of a Plan B, insisting Biden followed the law when he cited a provision in the 2003 HEROES Act that allows the education secretary to “waive” or “modify” student loans during a national emergency.
As the 26 million Americans who applied for student loan cancellation await a court decision likely to come in June, the White House is only willing to talk about Plan A.
Even Biden seemed doubtful the Supreme Court will uphold his action. “I’m confident we’re on the right side of the law,” Biden told reporters the day after the court hearing. “But I’m not confident about the outcome of the decision yet.”
If the high court strikes down Biden’s plan, what next? This is the tricky part – and there is no consensus.
White House officials had reservations about the legality of canceling student loan debt before Biden took action in August. Ultimately, in choosing the HEROES Act, Biden’s legal team pursued what it thought was the most viable path that could withstand legal scrutiny.
The clearest option to achieve the same goal – forgiving up to $20,000 in student loan debt for low- and middle-income households – would be for Congress to act. But even when Democrats controlled both chambers, canceling student loan debt lacked enough support for passage. Now that Republicans have taken over the House, there’s likely no legislative route.
Biden could propose a narrow plan that still invokes the HEROES Act, some legal experts argue.
Others believe Biden could turn to the Higher Education Act of 1965, which Biden and past administrations have cited to provide student loan debt relief to certain categories of borrowers such as teachers and the disabled.
The White House has touted its previous efforts to cancel debt through the Public Service Loan Forgiveness program. However, that approach is available only to borrowers working in the public sector. No existing programs provide relief comparable to that posed by Biden’s plan.
Instead, Biden might have to revert to smaller steps.
For example, alongside the debt forgiveness plan, Biden introduced a new program designed to more directly tie borrowers’ monthly loan payments to their income. The plan, which is still going through the Education Department’s regulatory process, would reduce some borrowers’ payments to 5% of their discretionary income.
While a Supreme Court defeat on student loan forgiveness would certainly be a setback for Biden, it could help him politically.
Biden, who is widely expected to announce a 2024 reelection bid this spring, could point to the Supreme Court blocking student loan debt forgiveness as another example of a court he’s argued is part of an increasingly extreme “ultra-maga” Republican Party.
The court’s Dobbs decision last year, which found no constitutional right to an abortion and overturned Roe v. Wade, energized female voters during the midterm elections, helping Democrats exceed expectations.
Cristina Tzintzún Ramirez, executive director of Nextgen America, the largest young voter mobilization group in the U.S., foresees a similar dynamic in 2024 if the Supreme Court rejects Biden’s debt cancellation.
“Blocking progress for 40 million Americans, especially young Americans, on student debt policy to radically transform their lives will be a huge mobilizing factor to turn people out in 2024,” she said.
Biden has already warmed up a message tailored for the campaign trail – contrasting his efforts to help Americans saddled with student debt to Republicans passing tax cuts for corporations.
“They’re the same folks who had hundreds of thousands of dollars – even millions of dollars – in pandemic relief loans forgiven,” Biden said recently, “and who voted for tax cuts for overwhelmingly benefit the wealthiest people in America.”
Having invested so much in a student loan debt plan tied up in court, the White House isn’t eager to talk about possible defeat.
But it might have to pivot.
As a Supreme Court decision draws nearer, millions of student loan borrowers are going to start asking, “What’s next?” if Biden loses the fight.
A moratorium on student loan payments – extended multiple times during the pandemic – will come to an end two months after the court’s decision.
Contributing: Chris Quintana, Nirvi Shah and John Fritze