U.S. Secretary of Education Miguel A. Cardona and President Joe Biden continue to promise student loan borrowers relief.
The day after the Supreme Court ruled 6 to 3 that Biden does not have authorization to forgive $400 billion in American student loan debt, Cardona released a statement that the Biden-Harris Administration will not stop fighting for borrowers.
“We believe the Supreme Court got it wrong,” Cardona said of Friday’s decision.
He said that he and Biden recognize the critical nature of the situation and what student debt relief would have meant for tens of millions of Americans and their families.
“This decision from the Supreme Court means that the Administration cannot move forward with the one-time student debt relief plan announced last year. The Department [of Education] had already approved applications for more than 16 million borrowers, and if you are one of those borrowers, you should know that we are unable to provide you with relief under this program due to the court’s ruling,” Cardona said.
On Friday, the administration announced three new actions in its fight to aid student loan borrowers. The administration will first take action to open an alternative path to debt relief for working and middle-class borrowers. The process has already begun through rulemaking to provide relief as fast as possible.
The second action was the release of details of the most affordable repayment plan ever created in the U.S. called the Saving on a Valuable Education (SAVE) Plan. Under this plan, borrowers will begin to save money later in summer 2023. Monthly payments will be cut to $0 for millions of borrowers who make $32,800 or less per year, or $67,500 a year for a family of four. All other borrowers will save at least $1,000 per year. The plan will stop runaway interest rates.
The third action by the administration is to help borrowers back into repayment by creating a temporary “on ramp” to repayment for one year for anyone struggling to make payments. During the “on ramp” period, missed, partial or late payments will not lead to negative credit reporting, default or loans being sent to collection agencies. Borrowers who can make payments, should make payments.
Cardona encouraged borrowers to visit StudentAid.gov/debtrelief to learn more and to identify a repayment plan that works for them when monthly payments resume in October 2023. He said the administration will continue its work to make college more affordable and accessible.
“Under President Biden’s leadership, we have taken unprecedented steps toward this goal, including by increasing Pell Grants by $900, which is the largest increase in a decade; fixing a broken Public Service Loan Forgiveness program and discharging $42 billion in debt so public service workers can get the loan relief they were promised; and holding colleges accountable when they take advantage of students and borrowers,” he said. “We will not stop fighting to make sure that student debt is not a barrier for Americans to access college or economic opportunity. We will continue to put the needs of students and borrowers first, help borrowers access the support and resources they need, and make the promise of college a reality for more American families.”
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Rebecca Barnabi
