« Today’s decision closed a road, » he said. « Now we will go after another one. »
While promising to abide by the court’s ruling, Biden struck a defiant tone, saying he would not be deterred from delivering on a key policy priority that progressives have long sought and which many Democrats say is important to inspire their constituents.
« I’m not going to stop fighting to provide borrowers with what they need, especially those at the bottom end of the economic ladder, » he said.
But Biden’s second attempt will face a number of major challenges, both practical and legal, as it embarks on what will be a lengthy regulatory process likely to stretch well into the next year before the presidential election.
For starters, the White House is nearing a deadline this fall as it prepares to resume collecting monthly payments from tens of millions of borrowers who have had their debt frozen since March 2020.
Education Secretary Miguel Cardona announced on Friday that student loan repayments would continue as planned this fall. But he said the administration is taking new steps to ease the resumption of payments, which will include the tens of millions of Americans promised relief under the now-defunct program.
The Education Department said it will create a 12-month transition period in which borrowers won’t suffer damages on their credit reports for missed payments, even if interest continues to accrue. Department officials earlier this month told loan servicers to develop an initial 90-day period of what they internally call a « safety net » period and to be prepared for subsequent extensions.
The administration also announced the new income-based repayment plan aimed at reducing monthly payments for borrowers, which Education Secretary Miguel Cardona called « the most affordable repayment plan in history. »
Biden administration officials acknowledged Friday that their Plan B option — the Higher Education Act route — would involve far more bureaucratic hoops and regulatory minutiae than the administration’s first plan, which was quickly implemented once Biden said it. he announced last August.
“This new path is legally sound,” Biden said. “It will take longer, but, in my view, it is the best avenue left to provide debt relief to as many borrowers as possible.
To begin, the Department of Education will hold public hearings and convene a negotiated regulatory commission that will debate and discuss potential options for canceling student debt.
White House officials said Friday they did not yet have more details on how the new program will be structured, nor did they say precisely when it might be available.
« It will take months, » said Bharat Ramamurti, deputy director of the National Economic Council. « We aim to do this as quickly as possible. »
But there are also major legal hurdles ahead. Some legal observers saw Friday’s 6-3 decision as severely limiting the administration’s options.
Jed Shugerman, a law professor at Boston University who supports student debt relief, said he believed the breadth of Friday’s ruling precluded the possibility of Biden using the Higher Education Act to develop another sweeping relief program of the debt.
Chief Justice John Roberts’ majority decision « is written in a very broad and aggressive way about the limited power of the agency, » he said, saying the court has expressed a new and broader skepticism about the government’s policies. executive branch under the « principal issues doctrine ».
Shugerman said he considers Biden’s options limited to student debt relief on a case-by-case basis under existing federal regulations governing cancellation, not creating new ones.
“It has to be new legislation or it has to be old regulations,” Shugerman said of the Biden administration’s options for moving forward with debt relief. « Roberts Court will not permit new regulations or new statutory interpretations as I am reading what they did today. »
Biden administration officials have been preparing for months for the possibility — which seemed likely after oral arguments in February — that the conservative majority on the Supreme Court will reject his student debt relief plan.
But officials privately weighed backup options even as they publicly advertised their confidence in their original legal rationale. In fact, according to data associated with the document, the Department of Education’s regulatory notice describing the new Higher Education Act plan was finalized Thursday night before the court’s decision was announced.
Progressive lawmakers and student debt relief advocates have been saying for months that the Biden administration should move quickly to a new legal rationale if its student debt relief plan using emergency powers linked to the Covid-19 pandemic escalates .
Advocates of student debt relief, after meeting with White House chief of staff Jeff Zients in May, sent a detailed legal memorandum for the administration to move quickly on debt relief if the court overturns the program.
In the legal note, obtained by POLITICO, proponents of student debt relief propose a wide range of options for the administration.
They include ways to rely on existing Department of Education rules under the Higher Education Act and federal standards for debt collection to get you debt relief faster than through the traditional regulatory process. Other options in the note include issuing interim definitive rules and forgoing some of the typical bureaucratic hurdles to issuing new regulations.
Calls from the left for Biden to move quickly to a Plan B to cancel student debt grew louder and more timely in the hours following Friday’s court ruling.
« Despite this legally unfounded Supreme Court decision, the president has clear authority under the Higher Education Act of 1965 to cancel student debt, » said Sen. Bernie Sanders (I-Vt.) said in a statement. « You must use this authority immediately. »
« President Biden and Secretary Cardona must bring relief to the coalition that delivered this White House, » said Rep. Ayanna Pressley (D-Mass.), who negotiated student debt relief with the White House. « A promise is a promise. »
But some progressives were already saying the administration hasn’t gone far enough after Biden’s initial remarks on his Plan B strategy on Friday.
“POTUS must invoke HEA to suspend interest and collections until debt is forgiven,” Rep. Ro Khanna (D-Caliph.) said on Twitter.
Lisa Kashinsky contributed to this report.