U.S. President Joe Biden speaks on student loan relief at Madison College in Madison, Wisconsin, on April 8, 2024.
Andrew Caballero-reynolds | AFP | Getty Images
A race for debt forgiveness after the Supreme Court verdict
After that, the president directed the US Department of Education to review its existing authority to forgive student debt. Mainly by improving current loan relief programs, the department has cleared the education debt of 4 million people, totaling $146 billion in aid, while Biden was in office.
But Biden has come under intense pressure to do more.
“Over 40 million people were promised cancellation, a number that dwarfs that [people] who have received some relief,” said Astra Taylor, co-founder of the Debt Collective, a union for debtors.
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On Monday, at an event in Madison, Wisconsin, Biden blamed the Supreme Court and Republicans for stopping his first relief plan.
“Tens of millions of people’s debt was literally going to be canceled, but then some of my Republican friends, elected officials and special interests sued us and the Supreme Court blocked us,” Biden said. “But that didn’t stop us.”
The president announced details of his Plan B for student loan forgiveness, which is more limited than his first effort but could reach tens of millions of people.
Rather than canceling loans for nearly all federal student loan borrowers, this program targets assistance to certain groups of people, including those experiencing financial hardship and graduates of poor quality schools. Meanwhile, about 25 million people could receive interest to clear their debt under the plan.
Can Biden Get Borrower Relief By November?
Kantrowitz said he expects the Biden administration to try to get people the new relief before they vote in November.
Student debt forgiveness could particularly help Biden with young voters, a demographic he struggles with. About 70% of Gen Z respondents said student debt relief was important to them in the election, according to the same survey.
The issue is an opportunity for Biden to differentiate himself from potential Republican rival Donald Trump, who has a history of opposing student debt relief.
Former President Donald Trump speaks during a news conference at 40 Wall Street on March 25, 2024 in New York.
Michael M. Santiago | Getty Images
While in office, the former president called for the elimination of the popular Public Service Loan Forgiveness program, signed into law by President George W. Bush in 2007. Trump also sided with the Supreme Court in its decision to strike down Biden’s plan.
“Today, the Supreme Court also ruled that President Biden cannot wipe out hundreds of billions, perhaps even trillions, of dollars in student loan debt, which would be grossly unfair to the millions and millions of people who paid off their debt through hard work and diligence. Very unfair,” Trump said at a campaign event in June 2023.
Legal threats are already mounting
Biden unveiled his first student loan forgiveness plan in August 2022 through an act of execution, which he hoped would enable him to deliver relief quickly. Borrowers were told they could expect relief within six weeks of applying.
That schedule was, of course, hampered by legal challenges and eventually struck down in the Supreme Court.
Issues like student loan forgiveness, which are sharply contested between Democrats and Republicans, are more likely to sway the election.
Mark Kantrowitz
specialist in higher education
Now, Biden has turned to negotiated rulemaking, a difference he hopes will make it harder for the courts to stop him this time.
“The rulemaking process is stronger than executive action,” Kantrowitz said.
But the process it can be long, with many steps. It involves a negotiating committee meeting and proposing a rule, publication of that proposed rule in the Federal Register, and then a public comment period. After all these steps, the US Department of Education can publish its final rule.
As of now, negotiators have completed their meetings and the Biden administration is ready to release its proposal. In theory, the Department of Education could publish its final rule sometime this summer, Kantrowitz said.
Although the regulations wouldn’t legally go into effect until July 2025 based on that timeline, Education Department officials could choose to put some of the provisions into effect sooner simply by publishing a notice in the Federal Register, Kantrowitz said.
“So they could easily implement it before the election,” he said.
However, legal challenges to the plan could delay that goal. Such threats have already begun to emerge.
On Monday, after Biden announced his Plan B for student loan forgiveness, Missouri Attorney General Andrew Bailey, a Republican, wrote to X that the president “is shamelessly trying to overshadow the Constitution.”
“See you in court,” Bailey wrote.