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

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

More about Biden’s alternative student debt relief plan

• Biden’s Student Debt Relief Proposal
• Supreme Court Decisions
• The Higher Education Act
• Understanding Student Loan Debt
• Republican Perspective on Student Loan Debt