Biden Says He’ll Try Another Way to Cancel Student Debt

“We need to find a new way, and we’re moving as fast as we can.”

Evan Vucci/AP

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After the Supreme Court threw out his debt relief plan earlier in the day, President Joe Biden promised in a White House speech Friday afternoon to pursue a different legal strategy for canceling student debt.

“I believe the court’s decision to strike down my student debt relief program was a mistake, was wrong,” he said. “So we need to find a new way, and we’re moving as fast as we can. First, I’m announcing today a new path consistent with today’s ruling to provide student debt relief to as many borrowers as possible as quickly as possible. We will ground this new approach in a different law than my original plan, the so-called Higher Education Act.”

This news is significant because, for years, debt cancellation advocates have pushed the administration to use the Higher Education Act (HEA), the 1965 law that governs federal student loans, to cancel student debt. Biden’s initial student debt cancellation plan relied on a different law, the George W. Bush-era HEROES Act, to issue sweeping cancellation, but Friday’s Supreme Court ruling closed off that route. 

As I wrote last year, some of the earliest champions for cancellation, including the Debt Collective and Sen. Elizabeth Warren (D-Mass.), have made the case that the HEA presents the best legal option for canceling debt. They’ve maintained that the portion of the law called “compromise and settlement authority” gives the Education Department carte blanche to tweak or even throw out its claims against borrowers. (Notably, the Debt Collective expressed skepticism on Twitter about the administration’s planned use of the HEA because it doesn’t implement relief automatically.)

This portion of the HEA says that the Education department can “compromise, waive, or release” their right to collect on loans. Biden used these exact words in his speech, suggesting that after years of avoiding this approach, it is now precisely the one his administration will take: “That will allow [Education] Secretary Cardona, whose with me today, to compromise, waive, or release loans under certain circumstances,” he said. “This new path is legally sound.”

Biden warned that this path would take longer, but also said that Cardona had already begun to craft a debt relief plan under the HEA. The department also posted an initial notice Friday on its website to kick off this regulatory process. 

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