Joe Biden went on TV yesterday to say he thinks the Supreme Court was wrong when it struck down his plan for up to $20,000 in student loan forgiveness in a highly dubious 6-3 ruling. Obviously, I was pretty excited about the decision, especially the fact that Republicans are okay with giving out corporate loans, tax cuts, and subsidies, but suddenly they’re really worried about the national debt if a struggling family gets a little bit of relief. goverment help. to give them a breather. But it was not only the condemnation of the Court and the greedy; Biden also highlighted what he intends to do now to help families with student debt.
Supreme Court: You owe your soul to the student debt store
Joe Biden is here with a few choice words on the Supreme Court’s student debt decision.
Here is the video; we have so much to come to in this post that we are just barely I’m going to mention the idiotic question at the end from Fox News’ Jacqui Heinrich, of course, who accused Biden of giving millions “false hope” with his debt forgiveness plan, because presumably he should have known in advance that the Supremes would act. illegally. . Kudos to Joe for not allowing that nonsense to stand and for pointing out that “Republicans took away the hope” the plan had given borrowers. Also, that brief flash of anger in his eyes before his rather measured response. I like this guy.
Biden said that since the Court stupidly ruled, we will add, that the loan forgiveness plan was not authorized by the HEROES Act of 2003, his administration would pursue a new path for loan forgiveness, using the authority of the Department of Education under the 1965 Higher Education Act (HEA), which first established low-interest federal student loans. Lyndon Johnson signed it into law, and it has been reauthorized nine times, with revisions to bring it up to date, such as the establishment of Pell grants in 1972.
The law authorizes the Secretary of Education to “pledge, 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 asked Biden to forgive student debt. True policy nerds can dive into this 7-page analysis Senator Warren commissioned in 2020 from the Harvard Law School Center for Legal Services, which concludes that the HEA gives the clerk the power to grant a “cancellation.” broad or categorical debt”.
Biden said he had already directed Education Secretary Miguel Cardona to begin the process of using the HEA to recover debt forgiveness; Due to the lengthy federal rulemaking process, it would likely take months to arrive at a final rule, which of course would then be subject to challenge in the same Court that decided to authorize the HEROES Act for the secretary to issue “waivers and modifications.” of the rights of students. loans in national emergencies was not good enough. To be sure, the HEA’s language is more expansive, but we suspect it still might not be enough for the Roberts Court because it also doesn’t say “including cancellation of up to $10,000 of debt for most borrowers, or $20,000 for those who received Pell”. PS: Alito is a tool.”
In addition to the second attempt at loan forgiveness, Biden also said that when the pandemic loan and interest payment pause ends on October 1 and loan payments are due again, the Department of Education will allow a “ramping” period. 12 months until September 30. , 2024. That’s to make sure that
financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, are not reported to credit bureaus, placed in delinquency, or referred to debt collection agencies.
In addition, Biden called attention to the Department of Education’s proposed revisions to the income-based repayment (IDR) plan for student loans, which were announced in January and are still in the federal rulemaking process. Once the revision goes into effect, many borrowers on the most popular income-based repayment plan will qualify for much lower monthly payments, and many financially challenged borrowers will actually see their monthly payments drop to zero. After 20 to 25 years, depending on the type of loan, the remaining debt will be paid off. People who initially borrowed $12,000 or less will have their loans forgiven after 10 years of payments. More about that program here.
Did Joe Biden Just Fix Future Student Loan Debt? Mayyyyybe!
I Prepared My Student Loans For Joe Biden’s Big Income-Based Forgiveness Marathon And So Should You
Also, while Biden didn’t mention it in his comments yesterday, keep in mind that, in another administrative action the Department of Education announced last year, millions of borrowers in IDR plans of all kinds will qualify for a one-time special adjustment. that could drastically reduce the number of payments they need to pay off their loans. More on that here; I still plan to do an update on that next week as well.
Finally, Biden also touted other measures his administration has taken, such as increasing the size of Pell Grants; fix the prosecution hurdles that had prevented participants in the Public Service Loan Forgiveness program from actually getting their loans forgiven (Biden, very helpfully, did not name Trump’s Education Secretary Betsy DeVos, who worsened the problem); and cancel more than $66 billion in student debt for those eligible public service workers, as well as students who were ripped off by the crafty for-profit colleges that were DeVos’s favorites.
The more I see how the Department of Education is fixing student loan problems, the more impressed I am.
Now, if we could address the many factors that have made college so expensive in the first place (the first being the states’ neglect of adequate fiscal support), we really would have something to brag about.
(CBS News/NYT/Harvard Law School/Refund determined by income at Studentaid.gov/Single IDR adjustment at Studentaid.gov)
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