Biden reveals new plan to make it easier to pay off student debt

President Joe Biden on Friday accused the Supreme Court of misinterpreting the US Constitution when it struck down its student loan forgiveness program and accused Republicans of taking away people’s hopes with their hypocracy on the issue.

In remarks at the White House, Biden said he was “angry” about the decision, but outlined several executive actions he was taking to help borrowers collect their loan payments without falling into financial difficulties.

And he argued that he wasn’t giving people “false hope” with his $400 billion program that would have forgiven $10,000 in student loans for those making less than $125,000 or households with incomes less than $250,000.

Supreme Court justices ruled 6-3 on Friday that Biden’s proposal to wipe out the debts of 26 million Americans at taxpayer expense was unconstitutional and beyond his executive powers.

The landmark ruling on the last day of the Supreme Court’s term comes 24 hours after the justices decided that colleges could no longer use race as a consideration in admissions in a case that drew opposition from Biden.

Biden was scathing in his response. He repeatedly leaned across the stage as he spoke, lowering his voice to a whisper—a tactic he employs when trying to make a point.

“I wasn’t giving false hope,” Biden snapped when asked by a reporter if he had misled borrowers.

‘The question was whether I would do more than asked. What I did I thought was appropriate and could be done and would be done. I have not given borrowers any lies. But the Republicans snatched away the hope they were given, and it is real. Real hope.’

He denounced the judges for their verdict: “I think the court has misinterpreted the constitution.”

And he accused the Republican of hypocrisy, arguing that many GOP lawmakers took advantage of pandemic-related relief programs for their own corporate debts.

Members of Congress who were vehemently opposed to giving aid to students themselves received hundreds of thousands of dollars in aid from the businesses they were able to keep open. Several members of Congress received more than a million dollars. All those loans have been forgiven. Do you know how much that program costs? $760 billion. My program is too expensive?,’ he said.

“Hypocrisy is amazing,” he added.

Biden also outlined his plan to help borrowers pay back their loans after being without a loan for three years while the program was fought out in court.

“Today’s decision has closed one avenue. Now we’re going to chase another. I’ll never stop fighting for you,’ he said.

He said the Department of Education would amend existing protocols, including the rule that student borrowers cannot repay more than 10% of their disposable income through debt for a month. He brought that down to 5%.

The department will also create an affordable installment plan that can save the typical borrower more than $1,000 per year.

The government did not detail the plan, but said it was already in the regulatory process required for federal regulation.

“If you can sustain payments for 20 years without missing them, your total debt will be forgiven for 20 years,” Biden said of the proposal.

In addition, the department will establish a 12-month temporary program called the on-ramp repayment program. If a loan misses a monthly payment, there is no risk of default under the program. The Department of Education will not refer any missed payments to credit bureaus for 12 months.

“We will use every tool at our disposal to get you the student debt relief you need and achieve your dreams. It’s good for the economy. It’s good for the country. It will be good for you,” Biden said.

President Joe Biden speaks in the Roosevelt Room with Secretary of Education Miguel Cardona

The Supreme Court has overturned President Joe Biden’s $400 billion student loan forgiveness plan in another bombshell decision. The judges ruled 6-3 against Biden’s controversial plan to wipe out the debts of about 20 million Americans

Biden’s plan would have wiped out $10,000 in debt for borrowers earning less than $125,000 and up to $20,000 for those with Pell Grants.

But it was challenged by six Republican states and two borrowers who argued that Biden should have sought congressional approval for a plan using significant tax dollars.

Chief Justice John Roberts agreed, saying in majority that a move “requires Congress to speak clearly before a Secretary of the Department (of Education) can unilaterally change large parts of the American economy.”

Millions of Americans have not had to pay back their loans for three and a half years due to a COVID pandemic freeze. Borrowers will have to resume their payments in October and interest will begin to accrue in September.

Biden’s loan forgiveness has been a cornerstone of his presidency, and the ruling will be a huge blow to the administration that has battled with mounting debt.

For months, Biden’s blueprint for student loans has been at the center of a legal battle involving six Republican-controlled states and two borrowers. Iowa, Arkansas, Kansas, Missouri, Nebraska and South Carolina said he had no legal authority to proceed with the plan without Congressional approval first.

Biden used the 2003 post-9/11 HEROES Act as justification for the program. It provides that the Department of Education may grant student debt forgiveness during a national emergency.

But according to the majority opinion written by the Chief Justice, the HEROES Act was not a legitimate basis for the plan.

“Congress did not pass the HEROES Act unanimously with so much power in mind,” Roberts writes, saying that such a decision of “such magnitude and ramifications” on a matter of “serious and profound debate across the country” by the congress itself.