Biden just took the first step to cancel student debt using a different law after the Supreme Court struck his first plan down — but it'll take 'longer' this time

President Joe Biden is joined by Education Secretary Miguel Cardona as he announces new actions to protect borrowers after the Supreme Court struck down his student loan forgiveness plan in the Roosevelt Room at the White House on June 30, 2023 in Washington, DC.

Chip Somodevilla/Getty Images

• The Supreme Court struck down Biden's first student-loan forgiveness plan on Friday.
• Hours later, Biden announced a new plan to try once again to get relief to borrowers.
• He's beginning the process of using the Higher Education Act of 1965 for relief.

President Joe Biden did not waste any time announcing a new plan to get student-loan forgiveness to millions of borrowers.

On Friday morning, the Supreme Court ruled Biden's initial plan to cancel up to $20,000 in student debt was an overreach of authority under the HEROES Act of 2003. That law gives the Education Secretary the ability to waive or modify student-loan balances in connection with a national emergency, like COVID-19, but the high court's majority ruled it was not the proper law to get relief to millions of borrowers.

Hours after the ruling, Biden announced his administration will be taking a new route. The Education Department filed a notice on Friday to begin the regulatory process of using the Higher Education Act of 1965 to cancel student debt, which does not require relying on a national emergency. 

"This new path is legally sound," Biden said during Friday remarks. "It's going to take longer, and in my view is the best path that remains in providing for as many borrowers possible. But I'm directing my team to move as quickly as possible on the law."

The Higher Education Act states that the Education Department can "enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand" related to federal student debt.

 

—President Biden (@POTUS) June 30, 2023

In addition to beginning the regulatory process for the Higher Education Act, the Education Department also announced it has finalized a new income-driven repayment plan to cut undergraduate payments for borrowers in half. 

While the department is still planning to resume student-loan payments in October, Friday's announcement also included a 12-month "on-ramp" from October 1, 2023 to September 30, 2024 — to ensure "financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies," according to a press release.

It's unclear what exactly the timeline will be for Biden's new student-loan forgiveness initiative. But it answers calls from many Democratic lawmakers who were urging the president to act quickly to announce a new route for relief.

"Today, I am urging the Biden Administration to implement a Plan B immediately to cancel student debt for tens of millions of Americans who are struggling to pay the rent, put food on the table, and pay for the basic necessities of life," Vermont Sen. Bernie Sanders said shortly before Biden's announcement. "Despite this legally unsound Supreme Court decision, the President has the clear authority under the Higher Education Act of 1965 to cancel student debt. He must use this authority immediately."

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