Student Loans: Does Biden Have ‘Legal Authority’ To Forgive Debt? One US Senator Thinks So

Mandatory Credit: Photo by Shutterstock (13993427a)United States President Joe Biden delivers remarks in response to the decision by the United States Supreme Court to block his administration's student loan forgiveness plan, in the Roosevelt Room of the White House in Washington, DC, USA, 30 June 2023.
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On June 30, almost a year since the program was announced, the Supreme Court — in a 6-3 decision — struck down President Biden’s student loan forgiveness program, which would have canceled up to $20,000 in debt for millions of borrowers.

The Supreme Court ruled that the HEROES Act — enacted in the wake of the Sept. 11 attacks — did not provide authority to grant relief from student loans. The decision was a win for Republicans, who had argued the program was “unfair,” a “handout” and would burden taxpayers.

Yet, some proponents of the relief program have been arguing that President Biden has “legal authority” to cancel the debt. A few days before the Supreme Court’s decision, Senator Elizabeth Warren (D-Mass.) reiterated her views on the subject.

“Let me be very clear, President Biden has the legal authority to cancel student loan debt,” Sen. Warren said during a June 26 webinar held by several advocacy groups, according to MarketWatch.

Warren has advocated for student loan relief repeatedly, calling the fight “personal.” The issue was central to one of her 2020 presidential campaign promises, in that “the Higher Education Act gives the Department of Education the ability to modify, compromise, waive, or release student loans,” according to her website.

“I’ve been in this fight for a long time and part of the reason is because it’s personal,” Warren said on June 26, adding she was the first person in her family to get a college degree, MarketWatch reported. “I then went to a public law school where I got a great education and I was able to do this because I grew up at a time in America when our country was investing in me and in our future,” Warren added.

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Supreme Court Student Loan Decision Not the End for Biden Admin

The June 30 decision to strike down the $430 billion program had been anxiously awaited by more than 40 million student loan borrowers. Replying to Biden’s follow-up tweet about the new plan to help borrowers after the decision came down, Sen. Warren tweeted:

“President Biden is right to fight back on behalf of working people in need of student debt cancellation. The law is on his side. The President has the clear legal authority to cancel student debt under the Higher Education Act. In a democracy, we have the final say.”

In fact, following the ruling, the administration announced it intended to take new steps to help borrowers, as GOBankingRates previously reported.

Said steps include seeking an “alternative path to debt relief” as well as the finalization of the “most affordable repayment plan ever created, ensuring that borrowers will be able to take advantage of this plan this summer — before loan payments are due.”

The repayment plan — called the Saving on a Valuable Education (SAVE) Plan — will cut monthly payments to $0 for millions of borrowers making $32,800 or less ($67,500 for a family of four). The plan will further save all other borrowers at least $1,000 per year, according to the Education Department. The SAVE plan will replace the existing Revised Pay-As-You-Earn (REPAYE) plan.

The administration also announced a 12-month “on-ramp” to repayment, running from Oct. 1, 2023 to Sept. 30, 2024, “so that 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.”

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