With his ambitious student loan debt cancellation plan shattered by the Supreme Court, President Joe Biden has launched a lengthy process to cancel borrowers’ debt by other means.
The president’s plan B is only beginning to take shape. But Biden said last week that the plan, rooted in the Higher Education Act of 1965, is “legally sound” and the “best path” left.
Shortly after the high court delivered its ruling Friday, the federal Education Department launched a so-called negotiated rulemaking process to pursue student debt relief, according to the White House. An initial virtual public hearing is scheduled for July 18.
The text of the Higher Education Act dictates that the Education Department must “obtain public involvement in the development” of new rules related to the law.
Under the process, representatives for students, higher education institutions and other stakeholders would negotiate a proposed rule with the Education Department, said Rebecca Natow, a professor of education policy at Hofstra University.
“We’re not going to waste any time on this,” Biden said in a Friday speech. “It’s going to take longer, but we’re getting at it right away.”
The White House also rolled out a new repayment plan, and said it would grant borrowers a yearlong “on-ramp” sparing them from default if they miss a payment.
A COVID 19-era pause on federal student loan debt repayment is set to end Sept. 1, with payments resuming in October, according to the Education Department.
Biden had initially planned to end the freeze by wiping out up to $20,000 in student loans for low-income Americans and up to $10,000 for individual earners making less than $125,000 a year.
In its original plan, the White House invoked a 2003 law called the HEROES Act that allows the Education Department to waive or tweak financial aid programs in times of national emergency. The White House cited the coronavirus emergency.
But the Supreme Court, which has a conservative supermajority, ruled in a 6-3 decision that Biden’s program exceeded his executive authority and reached beyond the text of the HEROES Act.
Some advocates for student loan debt relief — including Senate Majority Leader Chuck Schumer, a New York Democrat — urged Biden to use the Higher Education Act from the start.
The law’s provisions could put the White House on firmer legal footing. But plan B could invite legal challenges, and wind up at the Supreme Court as well.
———
