Editors note: On June 30, the Supreme Court rejected President Joe Biden's student loan forgiveness proposal 6-3.
“Let’s finish this job. I know we can,” President Joe Biden says in the April video launching his reelection campaign. In it, Biden shakes hands with Black elders, Black youths wear reelection T-shirts, and politicians walk across the Edmund Pettus Bridge in Selma, Alabama. As a Black student debtor who was promised student debt relief during Biden’s presidency, I am angry that Biden not only has not finished that particular job but botched it at every step. As an organizer with Debt Collective, I am channeling my anger into providing a roadmap of what has happened so far, what borrowers can expect, and how the administration can fix their mistakes.
In March, House Republicans introduced a resolution designed to take down Biden’s debt relief program. In particular, they wanted to block loan forgiveness and rescind the moratorium protections on student debt payments initially instituted by the Trump administration during the COVID-19 pandemic. Predictably, Biden vetoed the bill. But he left the fate of working-class Americans on the table during the recent debt ceiling negotiations instead of invoking the 14th Amendment to raise the debt limit without involving Congress, which could have won the respect of young Black voters like me who were promised targeted relief.
Biden’s handling of the debt ceiling fight casts doubt on his ability to see things through (for anyone who still thought he possessed that ability). To recap: The federal government usually spends more than it budgets, so once it nears the limit, the pressure is on to raise the debt ceiling or risk the US defaulting on its financial obligations. Since both Republicans and Democrats recognize the economic catastrophe a possible default would cause — from a stock market crash, delays in Social Security checks, to a surge in home prices — they prioritize and politicize these negotiations by demanding concessions from each other. In this case, Biden and House Speaker Kevin McCarthy cut a last-minute deal to suspend the debt limit until 2025. Using working-class families as bargaining chips, Biden’s bipartisan deal increases work requirements for recipients of food assistance programs, expedites the Mountain Valley Pipeline, codifies a definitive end to the student loan payment pause, and restricts the administration’s authority to initiate another pause.
Agreeing to turn payments back on is bad. There’s a lot of evidence that proves people are going to struggle to make their payments and that defaults are going to spike. But it’s even worse than that. While the White House boasted that the debt ceiling deal “saved” Biden’s popular student debt relief plan to grant federal borrowers up to $20,000 in relief, the reality is the program was already on shaky ground. Shortly after the program was announced, multiple right-wing lawsuits were filed to block the program. While many were dismissed, two of those suits made it to the Supreme Court, which is expected to issue a decision this month.
The two sets of plaintiffs include a pair of students who claim that Biden’s plan discriminates against borrowers who did not receive federal Pell grants as well as those with private student loans, and six Republican state attorneys general claiming it will have a negative financial impact on certain state-run programs and the states themselves. According to the Roosevelt Institute, a progressive think tank, the attorneys general failed to provide sufficient evidence that student debt cancellation would actually harm their bottom line. Student debt advocates like the Debt Collective expect the conservative-controlled Court to come back with an unfavorable decision.
But the president still has the power to cancel student debt, even if the SCOTUS case goes the wrong way. In other words, Biden has options and inaction cannot be one of them.
The cases before the Supreme Court are not about the legality of student debt relief in general, but rather the specific legal authority Biden used, namely the HEROES ACT. Fortunately, there are other legal tools available. For example, since 2020, student lending experts and activists have consistently communicated to White House officials that using the “Compromise and Settlement” power in the Higher Education Act of 1965 is a robust and viable option for broad-based student loan cancellation. That legislation states that the Department of Education can “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand" related to federal student debt. While using this power could also present legal challenges, organizers, borrowers, and elected officials have been clamoring for relief and offering solutions for years. Still, the president has either responded slowly or failed to do so altogether.
Approval of the debt ceiling deal means borrowers will need to begin making payments in October, with interest accruing starting on September 1. During the almost three-and-a-half-year moratorium, several large student loan servicers have exited their contracts with the Department of Education which will result in confusion and disorganization. (Borrowers should check studentaid.gov to see if their loans have been transferred to a new servicer and ensure their account reflects accurate dates and information.) More than 40 million borrowers who were eligible for relief — and 16 million people who were told by the government their applications were approved — will be in the horrible position of having loans reinstated that the administration promised to erase. This will, predictably, disproportionately harm working-class, young, Black, and Latinx borrowers. Alternatively, Biden can decisively implement a Plan B, pursuing another legal avenue to deliver promised relief.
This is a critical fork in the road. As it stands, the moratorium on payments was negotiated away to the Republicans, our relief is in the hands of what I consider to be an illegitimate Supreme Court, and the administration seems to lack a definitive strategy on this issue. As the 2024 election nears, Biden must keep debtors in mind as he seeks reelection after years of stalling and falling short. Long-shot 2024 presidential candidates Cornel West and Marianne Williamson — both supporters of broad-scale cancellation — could rattle Biden’s reelection prospects if they justifiably highlight this administration’s student debt cancellation fiasco.
Forty-three million debtors are waiting for the relief they were promised by this administration. Biden doing nothing if his program is blocked would be as if star NBA player Nikola Jokic and the Denver Nuggets threw in the towel after the Miami Heat tied up the series in game two of the best-of-seven finals. You still have five games left. Let’s play to win and finish the job.
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