“We will ground this new approach in a different law than my original plan, with the so-called Higher Education Act (HEA),” the president said, shortly after the Supreme Court struck down a previous plan pursued by the Biden administration to provide sweeping student loan forgiveness.
While it’s not yet clear how much relief borrowers could be eligible under the proposal, the previous plan pushed by the White House would have granted up to $20,000 in student loan forgiveness.
Biden said on Friday that Education Secretary Miguel Cardona has already begun taking steps to initiate the rulemaking process for the backup plan.
The process could go well to the end of 2023, but the administration said it will try to move “as quickly as possible.”
Under the HEA, advocates argue it allows the Education secretary to “compromise, waive or release” students loans. This path will require a public comment and notice period before it could go into effect.
Biden also announced an “on-ramp” repayment program for borrowers who may miss payments when they resume this fall.
It would remove the threat of default or harm to credit ratings because the Education Department won’t refer borrowers who miss payments to collection agencies or credit bureaus for 12 months.
“If you can pay your monthly bills you should, but if you cannot, if you miss payments, this on-ramp temporarily removes the threat of default or having your credit harmed,” Biden said.
The Hill’s Lexi Lonas and Alex Gangitano delve further here.
