Two federal judges in Kansas and Missouri on Monday blocked President Joe Biden’s administration from implementing a new student debt relief plan that would reduce payments, at the urging of several Republican-led states.
Bloomberg | Bloomberg | Getty Images
President Joe Biden could seek to forgive the debt of millions of people with federal student loans, just weeks before voters must choose between him and former President Donald Trump at the ballot box in November.
In the Biden administration’s Unified Agenda for Spring 2024, the U.S. Department of Education announced that it will publish final regulations on student debt forgiveness sometime in October.
Because of the timeline of regulatory changes, that would normally mean the administration wouldn’t be able to implement its program until July 2025, higher education expert Mark Kantrowitz said. But the department could act sooner by simply publishing a notice in the Federal Register, he noted.
More from Personal Finance:
The right mix of retirement accounts can lower your future taxes, experts say
Uncertainty over Biden’s re-election could spell trouble for student loan borrowers
Federal Judge Partially Blocks FTC Ban on Non-Compete Agreements: What It Means for Employees
“I expect the release (of the regulations) will happen in early October, so the conflict between Democrats and Republicans over student loan forgiveness will play out during the election,” Kantrowitz said.
An Education Department spokesperson said the Biden administration has already made historic changes to “a broken student loan system.”
“This administration is committed to helping as many borrowers as possible as quickly as possible, and these regulatory efforts could provide financial breathing room for tens of millions of additional borrowers,” the authorities said.
Loan forgiveness is a hot topic in party politics
Conservatives typically question the fairness of forgiving the debt of those who benefited from higher education and saddling taxpayers with the cost. Just over a third of Americans 25 and older have a bachelor’s degree, according to Kantrowitz’s estimate.
“We are proud to join taxpayers in demanding that the Biden administration abandon plans to force all Americans to assume the debt of a select few, something the Supreme Court has already ruled unconstitutional,” said Ryan Walker, executive vice president of Heritage Action for America.
“Biden’s latest debt transfer ploy is an illegal, dishonest election stunt that will backfire — and should cost him the ballot box,” Walker said.
Nearly half of all voters — 48% — say canceling student debt is an important issue for them in the 2024 presidential and congressional elections, according to a recent survey from SocialSphere, a research and advisory firm. It polled 3,812 registered voters, including 2,601 Gen Z and millennial respondents, between March 15 and 19.
Additionally, 70% of Gen Z respondents said the action was “very” or “somewhat” important in the election, while 72% of Black voters and 68% of Hispanic voters surveyed said the same.
Many young conservatives also support canceling student debt. For example, 49% of Republicans surveyed among Gen Z and millennials said some or all of their student debt should be canceled.
As president, Trump called for the elimination of the U.S. Department of Education’s existing loan relief programs, including the popular Public Service Loan Forgiveness initiative. He also wanted to slash the department’s budget, and his administration ended a program aimed at providing loan forgiveness to those defrauded by their schools.
Now that he is running for president again, Trump appears intent on making even deeper cuts to student financial aid programs. He has repeatedly attacked Biden’s loan relief policies and said in a late 2023 campaign video that he wants to close the Department of Education altogether.
Republicans May Try Again to Stop Emergency Plan
Since the U.S. Supreme Court rejected Biden’s first attempt at large-scale loan forgiveness last summer, his administration has been working on a second-chance plan. While the Education Department tried to target the aid more effectively this time around in an effort to improve survival rates, it could still benefit 20 million people.
To critics of broad student loan forgiveness, Biden’s new plan looks a lot like his first.
After Biden touted his revised relief package, Missouri’s Republican Attorney General Andrew Bailey said wrote on X that the president “is openly attempting to overshadow the Constitution.”
“See you in court,” Bailey wrote.
Missouri was one of six Republican-led states — along with Arkansas, Iowa, Kansas, Nebraska and South Carolina — that filed a lawsuit challenging Biden’s first major debt restructuring effort.
The red states argued that the president had overstepped his authority and that debt forgiveness would hurt lenders’ profits. The conservative justices on the Supreme Court agreed with them.
Once the Biden administration releases its new student loan forgiveness plan in October, more legal challenges are inevitable, Kantrowitz said.
“There will be swift litigation to block the final regulations once they are published,” he said.
A recent Supreme Court ruling could make it even harder for Biden’s revised plan to survive these attacks.
The Supreme Court in late June rejected the so-called Chevron doctrine, a 40-year-old precedent requiring judges to defer to a federal agency’s interpretation of contested laws. The 6-3 ruling, which split the conservative court along ideological lines, is expected to undermine the federal government’s regulatory power.
EMEA Tribune is not involved in this news article, it is provided by our partners and/or the news agencies. Copyright and Credits go to the news agencies, email [email protected] Follow us WhatsApp verified channel
