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White House Implements Measures to Mitigate Risk of Default On Student Loans

Biden Takes Action to Fulfill Promises of Relief for Borrowers


President Joe Biden made a commitment on Friday to move forward with a new plan to provide relief to student loan borrowers, while attributing the day’s Supreme Court decision that invalidated his original effort to Republican ‘hypocrisy.’

He stated that his administration had already initiated the process of working under the authority of the Higher Education Act of 1965, which he deemed ‘the best path remaining to offer debt relief to as many borrowers as possible.’

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Meanwhile, as student loan payments are set to resume in the fall, the White House is devising an ‘on ramp’ to repayment and implementing measures to mitigate the risk of default for borrowers who fall behind over the next year.

The president highlighted that the newly introduced programs will require more time compared to his initial effort to alleviate student loan debt.

By attributing the strong opposition to student loan forgiveness to the GOP, Biden’s reelection campaign aims to persistently exhibit strength on this issue in the short term. However, this may provide little consolation to the 43 million Americans who benefited from the original program and will now have to wait for its replacement to take effect.

Wisdom Cole, the national director of the NAACP Youth & College Division, emphasized that Black Americans played a crucial role in putting Biden in the White House, creating an obligation for him to ‘complete the task’ by fulfilling his promises of relief for borrowers.

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A May poll conducted by The Associated Press-NORC Center for Public Affairs Research indicated that 43% of U.S. adults approve of Biden’s approach to handling student debt, similar to his overall approval rating of 40% in the same survey.

The poll revealed that Biden’s handling of the issue is particularly favored among young adults, with 53% of adults under age 30 approving of his approach to student debt compared to only 36% who approved of his overall job performance.

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Senior administration officials revealed that Biden’s top advisers had recently held frequent meetings to prepare for a Supreme Court ruling on student loans.

They also engaged in conversations with advocates and allies in Congress. Following Friday’s decision, Biden met with his top advisers and instructed them to immediately commence the implementation of a new loan plan.

Although the White House asserts that its new initiatives will withstand future legal challenges, even with the Supreme Court’s current conservative majority, it continues to maintain that its original plan was legal as well.

Biden expressed irritation at the suggestion that his efforts to alleviate student loan burdens had given borrowers false hope, stating, ‘I didn’t give any false hope. The Republicans snatched away the hope that they were given.’

The political stakes are particularly high as progressive Democrats in Congress and activists have been persistently urging the administration to offer an alternative to Biden’s initial student loan plan for months, fearing that the Supreme Court would ultimately block the president’s original efforts.

Many progressives argued that the Higher Education Act was the most suitable instrument from the beginning, although the administration was concerned that employing the act initially could have resulted in slower implementation.

The new approach utilizes a provision that allows Education Secretary Miguel Cardona to ‘compromise, waive or release’ student loans. Last year, the Biden administration employed the same foundation to forgive $6 billion in loans for borrowers who were deceived by their colleges.

The specifics of the new forgiveness program will be negotiated through a federal rulemaking process that the administration launched on Friday. This process enables the Education Department to establish or modify federal regulations with the effect of law.

However, there is no guarantee that the plan will survive another legal challenge. While the Higher Education Act has been utilized to cancel student debt in the past, it has never been employed at this scale. Lawyers from the Trump administration concluded in 2021 that the education secretary ‘does not have the statutory authority to provide blanket or mass cancellation’ under the act.

The GOP has consistently argued that repaying student loans is a matter of fairness, and many prominent Republicans celebrated Friday’s ruling. Betsy DeVos, who served as the secretary of education under President Donald Trump, criticized Biden’s original plan as ‘deeply unfair to the majority of Americans who don’t have student loans.’

Republican contenders for the party’s 2024 presidential nomination also expressed their pleasure with the decision, including former Vice President Mike Pence, who affirmed, ‘I am pleased that the court struck down the radical left’s effort to use the money of taxpayers who played by the rules and repaid their debts in order to cancel the debt of bankers and lawyers in New York, San Francisco, and Washington.’

Nevertheless, after Biden announced his response to the Supreme Court ruling, some Republicans were swift to reject it. Representative Virginia Foxx, a North Carolina Republican, stated, ‘Taxpayers just got sucker punched – again – by this administration. Today, President Biden announced that taxpayers will be forced to pay for the costliest regulation in our nation’s history.’


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