Biden changes tack on student debt after Supreme Court blocks his plan

Washington, Jun 30 (EFE).- United States President Joe Biden said Friday that his administration is taking a different approach to providing relief to people struggling to pay back their student loans following the Supreme Court decision striking down his plan to cancel more than $400 billion owed by 43 million borrowers.

“I’m announcing today a new path consistent with today’s ruling to provide student debt relief to as many borrowers as possible as quickly as possible. We will ground this new approach in a different law than my original plan, the so-called Higher Education Act,” he said at the White House.

“This new path is legally sound. It’s going to take longer, but in my view it’s the best path that remains,” the Democratic president said with Education Secretary Miguel Cardona at his side.

Cardona and his team have started work on a process to “compromise, waive or release loans under certain circumstances,” Biden said.

And with student loan repayments set to resume in the fall after an extended pause due to the Covid-19 pandemic, he announced an “on-ramp repayment program” aimed at lessening the burden on borrowers.

From Oct. 1, 2023, to Sept. 30, 2024, the Department of Education will not label borrowers who miss payments as delinquent or refer them to credit agencies, the president said.

Another initiative, Saving on a Valuable Education (SAVE), will limit monthly repayments to 5 percent of the borrower’s income, down from the present level of 10 percent.

“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.

By a 6-3 vote, the conservative majority Supreme Court ruled that the administration’s use of the 2003 HEROES Act to forgive up to $20,000 in student debt per borrower was invalid.

Enacted following the Sept. 11, 2001, terrorist attacks, HEROES (Higher Education Relief Opportunities for Students) gives the education secretary authority to “waive or modify” rules for student loan borrowers who are 1) in the military or the National Guard; 2) reside in a declared disaster area; or 3) have experienced economic hardship due to wars, military operations, or national emergencies.

When then-President Donald Trump declared a national emergency over Covid-19, application of HEROES led to the pause in student loan repayments.

Biden, who promised student debt relief during his 2020 campaign against the Republican incumbent, invoked the HEROES Act to forgive a portion of debt.

Several Republican-controlled state governments filed legal challenges and two of those cases reached the Supreme Court, which unanimously threw out one suit, but upheld the other.

Republican politicians hailed Friday’s ruling, which prompted Biden to denounce them for “hypocrisy,” noting that most GOP lawmakers voted for the Paycheck Protection Program that provided subsidies to businesses during 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.”

EFE er/dr

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