WASHINGTON — President Joe Biden said Friday he’ll give a second go at his student debt relief plan, rooting it in the Higher Education Act, after the U.S. Supreme Court ruled against his initial plan to forgive up to $20,000 per borrower.
“I believe the court’s decision was a mistake, it was wrong,” Biden said, speaking from the White House. “We need to find a new way and we’re moving as fast as we can.”
The Supreme Court ruled Friday in a 6-3 decision against Biden‘s plan to cancel up to student loan debt for an estimated 40 million Americans. The venture would have forgiven more than $400 billion in student loan debt, making it one of the most expensive executive actions in history.
Biden pointed to the greenlighting of the Paycheck Protection Program under former President Donald Trump, which cost an estimated $760 billion.
“The hypocrisy is stunning,” Biden said. “You can’t help a family making $75,000 a year but you can help a billionaire and have your debt forgiven? My plan would not only have been life changing for millions of Americans, it would have been good for the American economy.”
Biden said Friday he also has directed the U.S. Department of Education to institute a 12-month “on-ramp” period that would grant borrowers struggling to adjust to repayments after the three-year pause forgiveness for missing initial payments.
Biden stressed it is not an extension of the pause as payments will still be due and interest will accrue, but the Department of Education would not report failure to make payments to credit agencies for the first year.
Last summer, Biden announced his plan to cancel $10,000 in student debt for borrowers earning less than $125,000, or married couples earning under $250,000. Pell grant recipients were eligible for up to $20,000 in forgiveness under the proposal.
The Supreme Court ruling Friday places millions of student loan borrowers back at square one as the payments pause instituted at the beginning of the Covid-19 pandemic comes to a close in October. During the pause, implemented under the Trump administration, borrowers did not have to make payments on their loans nor did the loans accrue interest. source
Can you please explain it to me like a five year old? The way I understand it is that the cancellation basically means that the federal govt will take on the debt - which amounts to spending. Spending is decided on by the Congress and not the Executive. Having said that, everything could in theory be all good until someone files a lawsuit against the action, which in this case someone did. Am I understanding it correctly?
Student loans are a complex beast. The loans that anyone in the government have any real control over are only loans owned by the federal government. Private student loans, including loans that were refinanced, are rarely owned by the government and are, essentially, private party loans. There is no realistic path to forgiveness for these loans.
Of the loans owned by the US Government, the actual entity that owns the debt is the Department of Education.
The theory for forgiveness runs that the debt already assumed by the Dept. of Education. It’s already on their books, as it will. Forgiving some of the debt would be amount to a ledger change - Bob used to owe $25,000. Now Bob owes $15,000.
It’s not spending per se, any more than lowering taxes is spending.
Removed by mod
It was so nice before the shitbirds showed up.
As far as I can tell it’s just this one person.
Removed by mod
Wow what an amazing comeback.
You seem to be complaining a lot in this thread. If you don’t agree with what someone is saying, why don’t you respectfully explain your reasoning instead of spouting nonsense?
Meet the negative part of the Reddit exodus. Some of the idiots will find a how-to Lemmy on google.
Congress gave the Secretary of Education broad authority over student loans in national emergencies with the HEROES act. COVID was declared a national emergency. The Supreme Court basically said they can’t do that even though that’s exactly what they wanted to do. It’s pretty plain bullshit. It’s why the dissenting opinion didn’t just disagree. accused the court of grossly overstepping its authority.
The fucking audacity for them to say it requires direct authorization by Congress…what the fuck else do you call the HEROES act…it was passed by Congress to authorize exactly the kind of things they used it for, such as and including loan forgiveness…these Republican assholes in the supreme Court are openly mocking the court and showing everyone their asses because they know you can’t do a thing about it. So tired of this shit
Exactly. They’re not arguing that it’s unconstitutional, they’re arguing that Congress can’t do that…lol. The SCOTUS put themselves in charge of Congress.
They don’t necessarily have to spend a dime, seeing how the government is providing these loans. It would amount to not getting paid back, but they already spent the money when they sent out the loans. So it costs nothing to say hey just don’t pay us back
deleted by creator
Biden attempted to do this through the method that he thought would be the most plausible to accomplish which was as an emergency action in response to the covid pandemic. The Supreme Court’s decision was based off of false evidence that the plaintiff would be materially harmed which is turning out to not be the case.
The other option which is less likely to happen would be to have the Secretary of Education forgive some of the debt. This is dubious because although the Secretary of Education does have the authority to forgive debts, the specific statute under the Higher Education act makes it clear that it is only with regard to the proper functioning of the Department of Education. I disagree with @MsPenguinette@lemmy.world since everything I have read on the matter makes it clear that the power of the purse, except in very limited circumstances, is in the hands of Congress. It makes no sense that Biden would have this broad power and not use it for his own political ends. Biden and his team know that going this route would be a Hail Mary.