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Biden Proposes Substitute Plan for Student Debt Relief to Avoid Immediate Default Risk

by Joshua Brown
5 comments
Biden's alternative student debt relief plan

President Joe Biden has put forward a substitute plan for student debt relief, aiming to mitigate the risk of default for borrowers who lag behind on their payments. This move comes after his original initiative was overruled by the Supreme Court.

In a statement on Friday, Biden criticized the Supreme Court’s ruling, attributing it to Republican opposition and describing the decision as flawed.

President Biden intends to exercise the authority granted by the Higher Education Act to initiate a new program. This program would commence loan repayments while eliminating the immediate risk of default. Although the plan would take more time, it promises to offer relief to millions of borrowers.

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BREAKING NEWS UPDATE: The previous AP story follows.

WASHINGTON (AP) — After the Supreme Court dismissed his original initiative, the Biden administration is progressing with a new plan for student debt relief that aims to assist 43 million borrowers.

On Friday, President Joe Biden asserted that “this fight is not over,” and accused Republican opposition of being responsible for the failure of his original proposal.

The initiative was part of Biden’s campaign promise and considered crucial to gain the support of young voters in the upcoming presidential race — a demographic vital for his reelection campaign.

According to the White House, Biden’s Chief of Staff, Jeff Zients, has been conducting weekly meetings in anticipation of the Supreme Court ruling. Administration officials have also interacted with numerous advocates and allies in the congressional community to ensure a fully formed response once the court passed its judgement.

Following Friday’s ruling, Biden met with senior staff to discuss the implications and formulate an alternative plan. Further details were not provided by the White House.

BREAKING NEWS UPDATE: The previous AP story follows.

WASHINGTON (AP) — After the Supreme Court rejected his $400 billion student loan forgiveness proposal, President Joe Biden reiterated on Friday that “this fight is not over.” He held Republicans responsible for the plan’s downfall, encouraging borrowers to direct their frustration towards the GOP rather than his party in the upcoming elections.

Placing the blame for the plan’s termination on the GOP could enable Biden’s reelection campaign to maintain the issue of student loans as a point of strength in the short term. However, this might offer little consolation to the 43 million Americans who may now have to resume repaying their student loans.

As the student loan program’s consequences unfold, progressive Democrats in Congress and activists are demanding a prompt and significant response from the White House. Democratic Senator Elizabeth Warren has urged Biden to use all available tools to cancel student debt.

Meanwhile, the GOP, having long considered student loan repayment a fairness issue, celebrated the ruling. Republicans eyeing their party’s 2024 presidential nomination lined up to praise the decision.

While the administration faces pressure from activists and progressive Democrats to create a backup plan that offers relief to borrowers, it has spent months avoiding public discussion of an alternative.

Notably, a recent poll revealed that 43% of U.S. adults approve of Biden’s handling of student debt. The White House now faces the significant task of employing the Higher Education Act of 1965 as a legal foundation for debt relief.

This latest development comes at a time when loan payments, which have been suspended since the onset of the COVID-19 pandemic three years ago, are scheduled to resume in the fall.

The White House’s previous attempts to postpone payments were part of Biden’s 2020 campaign promise to eliminate student loan debt, a proposal especially popular among young voters and progressives. However, these demographics might now be less enthusiastic about supporting him following the high court’s decision.

The implications of the student loan program could potentially be much more significant than a COVID pandemic-era ban on nationwide evictions. In light of this, the Biden administration is now under increasing pressure to act on student debt.

Contributors to this report include Big Big News writers Chris Megerian and Collin Binkley.

Frequently Asked Questions (FAQs) about Biden’s alternative student debt relief plan

What is President Biden’s alternative student debt relief plan?

The plan is designed to mitigate the risk of default for student loan borrowers who fall behind on their payments. It proposes to initiate a new loan repayment program under the authority of the Higher Education Act, eliminating the immediate threat of default. Although the plan would take longer to execute, it is expected to provide relief to millions of borrowers.

Why did President Biden introduce an alternative student debt relief plan?

Biden’s original initiative for student debt relief was dismissed by the Supreme Court. In response, he has proposed this alternative plan to continue efforts towards easing the burden of student loans for millions of borrowers.

Who was responsible for the original plan’s dismissal according to Biden?

President Biden attributed the dismissal of his original plan to the Republican opposition and criticized the Supreme Court’s ruling.

What are the political implications of the Supreme Court ruling?

The decision could have significant political consequences. Biden’s reelection campaign could maintain student loans as a strength issue by placing the blame for the plan’s termination on the GOP. However, the failure of the original plan might affect his support base, especially among young voters and progressives.

What are the next steps following the Supreme Court ruling?

Following the Supreme Court’s ruling, President Biden met with senior staff to discuss the implications and formulate an alternative plan. However, the White House has not yet provided further details on this matter.

More about Biden’s alternative student debt relief plan

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5 comments

Tom_R June 30, 2023 - 10:17 pm

I have been paying my student loan for ages now! finally, someone cares about us. good on you Biden, hope this works out.

Reply
Karen_M July 1, 2023 - 1:07 pm

So, biden’s plan got shot down by the supreme court?? didn’t see that coming at all…

Reply
Samantha_P July 1, 2023 - 2:49 pm

Fingers crossed! really hoping this alternative plan will provide the relief we need.

Reply
Dave_W July 1, 2023 - 5:17 pm

does anyone knw when this new plan goes into effect?? i’m kinda struggling here with my debt. thnx in advance.

Reply
Jerry_L July 1, 2023 - 7:02 pm

can’t believe they struck down the original plan… student debt’s a real problem, folks. Hope this alternate plan does sumthin…

Reply

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