WASHINGTON — President Joe Biden said Friday he would give his student debt relief plan, rooted in the Higher Education Act, a second chance after the US 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 have 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 move would have forgiven more than $400 billion in student loan debt, making it one of the costliest 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 make $75,000 a year but you can help a billionaire and get your debt forgiven? My plan will not only change lives for millions of Americans, it’s good for the economy of America.”
Biden said Friday that he also directed the US Department of Education to institute a 12-month “on-ramp” period that would give borrowers struggling to adjust payments after a three-year pause forgiving for missing advance payments.
Biden is not an extension of the pause because payments will still be made and interest will accrue, but the Department of Education will not report failure to pay to credit agencies for the first year.
Last summer, Biden announced his plan to cancel $10,000 in student loans for borrowers earning less than $125,000, or couples earning less than $250,000. Pell grant recipients are eligible for up to $20,000 in forgiveness under the proposal.
The Supreme Court’s ruling on Friday puts millions of student loan borrowers at square one as the pause in payments that began at the start of the Covid-19 pandemic ends in October. During the pause, implemented under the Trump administration, borrowers do not have to make payments on their loans and the loans do not accrue interest.
Biden criticized the Supreme Court decision as a mistake.
“I think the court misinterpreted the Constitution,” Biden said.
It was the second time in as many days that the president criticized the Supreme Court for its decisions, stemming from comments made Thursday in response to the court’s decision to reject the use of affirmative action in college admissions. Asked if it was a “rogue court,” Biden told reporters, “This is not a normal court.”
Speaking on MSNBC’s “Deadline: White House” on Thursday, Biden said the current Supreme Court “has done more to resolve fundamental rights and fundamental decisions than any other court in recent history.”
“I think some on the court are starting to realize that their legitimacy is being questioned in ways that it hasn’t been questioned in the past,” the president said.
