On Friday, the Supreme Court canceled President Biden’s plan for student debt relief, which would have forgiven at least $10,000 in federal student loans for eligible borrowers earn less than $125,000 per year.
Judges ruled debt cancellation was not authorized by the HEROES Act of 2003, the basis used by the Biden administration to implement the program, stalling an effort to erase $430 billion in debt .
Hours after the decision, President Biden announced that he had directed Education Secretary Miguel Cardona to begin a process under a law known as the Higher Education Act to compromise , waive or release loans “under certain circumstances,” for the roughly 40 million Americans eligible for student loan debt relief.
“Today’s ruling closed a doorway,” Biden said. “Now we will pursue another one. I will never stop fighting for you. We will use every tool at our disposal to get you the student debt relief you need to achieve your dreams.”
In a social media post, Secretary Cardona said the administration remains “fully committed to ensuring students can pursue post-secondary education and build fulfilling careers without the burden of student debt holding them back.” to access opportunities.
What is the Higher Education Act?
On November 8, 1965, President Lydon Johnson signed into law the Higher Education Act declaring that “higher education is no longer a luxury, but a necessity”. The Higher Education Act has been reauthorized nine times, the last in 2022.
The law was designed to ensure that every American, regardless of income or background, would have access to higher education. The law regulates financial aid for post-secondary and higher level students, scholarships and work-study programs.
The law also supports teacher training, community service, and library programs. The most important and essential element, however, was the introduction of low-interest federal student loans. These loans are made by the government using federal capital. In 1972, Pell Grants were created by law — and 51% of funds go to students whose families earn less than $20,000 a year, according to Education Data Initiative.
The law also established and governed other programs that help students pay for higher education. The U.S. Department of Education estimates that in 2024, $85.8 billion in student loans will be issued to undergraduate and graduate students through programs authorized by the Higher Education Act.
Could the law on higher education lead to debt forgiveness?
The Higher Education Act allows the Secretary of Education to “compromise, waive, or release” federal student loans. Student debt relief was given to borrowers with disabilities, employed as teachers, or who were unable to complete a degree program because their higher education institution closed, according to a report by the Congressional Research Service.
However, the law must go through the development of negotiated rules to make changes to bylaws – a process that could take a year or more.
“It’s subject to federal regulatory review and comment. It’s a much longer process,” said Maj. Garrett, chief Washington correspondent for CBS News. “When the president said it was going to take a while, they will move as fast as they can – they can only move as fast as this regulatory process – which has very specific guidelines and hurdles – can go. “
The White House released a fact sheet late Friday afternoon saying the Education Department had initiated rulemaking “aimed at providing an alternative path to debt relief for as many people as possible.” ‘borrowers as possible’.
Under the Higher Education Act, the ministry took the first step and issued a Notice of Public Hearing. After the hearing, rulemaking sessions will be negotiated in the fall, the White House said.
Reporting provided by Melissa Quinn and Kathryn Watson
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