Joe Biden said “the fight is not over” on his administration’s efforts to cancel student loan debt, despite defeat in the US Supreme Court.
The president announced a “new path” towards providing debt relief for as many borrowers as possible shortly after the pivotal decision by the highest court in the land.
By a vote of 6-3, judges ruled that Mr Biden’s loan forgiveness promise from his 2020 campaign was not authorised in law.
But Mr Biden said that decision was “wrong”, and decried the Supreme Court for siding with Republican elected officials, instead of providing support to more than 40 million working and middle-class Americans.
He also criticised the “hypocrisy” of Republicans who opposed the $400 billion (£320 billion) package, despite supporting billions in pandemic-related loans to businesses which were forgiven.
“But when it came to providing relief to millions of hard-working Americans, they did everything in their power to stop it,” he said. “I will stop at nothing to find other ways to deliver relief to hard-working middle-class families.
“My administration will continue to work to bring the promise of higher education to every American.”
Miguel Cardona, the education secretary, initiated a rule-making process aimed at opening an alternative path to debt relief using his authority under the Higher Education Act to “help the working- and middle-class borrowers who need it most”.
The department issued a notice, announcing a virtual public hearing in July, which is the first step in the process of issuing new regulations under a “negotiated rulemaking” process.
Mr Biden said he will continue fighting and claimed that the new path, which would be consistent with the Supreme Court’s ruling and is “legally sound”, will allow Mr Cardona to compromise, waive or release loans under certain circumstances.
“It’s going to take longer, but in my view it’s the best path that remains to providing as many borrowers as possible with debt relief,” he said.
The Department of Education also finalised the Saving on a Valuable Education programme, which it called the “most affordable repayment plan ever created”.
This income-driven repayment plan will cut borrowers’ monthly payments in half, allowing the typical borrower to save more than $1,000 per year on payments.
The Biden administration said that borrowers will be able to take advantage of it this summer – before loan payments are due.
Furthermore, a 12-month “on-ramp” to repayment would be introduced, meaning that financially vulnerable borrowers missing monthly payments will not be considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.
“President Biden, vice-president Harris, and I remain fully committed to ensuring students can earn a postsecondary education, and build fulfilling careers without the burden of student loan debt blocking them from opportunity,” said Mr Cardona.
