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student loans
Right-Wing Supreme Court Keeps Pause on Biden's Student Debt Relief Effort
"I reckon the U.S. Supreme Court does not like millions of people being able to afford to make payments on their student loans," said one journalist who had benefited from the SAVE program.
Aug 28, 2024
Millions of student loan borrowers whose monthly payments had been reduced by U.S. President Joe Biden's latest attempt to achieve debt relief were thrown into limbo Wednesday as the right-wing majority on the Supreme Court ruled in favor of a sweeping suspension of the president's policy.
After several Republican-led states filed lawsuits against the Saving on a Valuable Education (SAVE) program, the U.S. Court of Appeals for the 8th Circuit ruled last month that the program should be paused while it evaluated the merits of the case.
The Biden administration had asked the high court to clear the way for SAVE to go back into effect, allowing 8 million Americans enrolled in the program to make monthly loan payments based on their incomes.
Mike Pierce, executive director of the Student Borrower Protection Center, said the Supreme Court "bought into the 8th Circuit's legal fiction that pausing affordable payments is 'preserving the status quo,'" issuing a ruling he denounced as "bullshit."
Under SAVE, which has already cleared debts for 400,000 borrowers, the Biden administration reduced monthly payments for undergraduate loans to 5% of the borrower's discretionary income, down from 10%. Loans of $12,000 or less were to be canceled after 10 years instead of 20-25 years, as long as the borrower made required payments.
The administration argued that the program was in accordance with a 1993 law allowing the secretary of education to establish "income contingent repayment" plans based on "the appropriate portion of the annual income of the borrower."
After the lower court's earlier ruling, Education Secretary Miguel Cardona said the court had rejected "a practice of providing loan forgiveness that goes back 30 years."
Ashton Pittman, an editor for the Mississippi Free Press, said the program had reduced his monthly student loan payments so that he was "finally able to reliably make them each month."
"But I reckon the U.S. Supreme Court does not like millions of people being able to afford to make payments on their student loans," said Pittman.
The Debt Collective, a national student loan borrowers union, suggested the latest ruling—which comes over a year after the Supreme Court struck down a broader student debt relief plan from Biden—shows that the fight for debt forgiveness cannot be won through the federal court system.
The Debt Collective has joined progressive lawmakers and other groups in calling for the Department of Education to cut ties with the Missouri Higher Education Loan Authority (MOHELA), which services federal student loans and which Missouri Attorney General Andrew Bailey said would lose revenue if student debt cancellation is allowed to move forward.
"Biden is losing in court because he is not being politically or legally savvy," said the group after the 8th Circuit ruling was announced. "He should fire MOHELA and issue cancellation swiftly and automatically through an executive order and issue pause."
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Sanders Leads Senate Dems in Push to Strengthen Student Loan Debt Relief
"We must act boldly so that the millions of Americans who are struggling to pay for basic necessities are not crushed by mountains of debt for getting a college education," said the Vermont senator.
May 21, 2024
Applauding the Biden administration for its proposal of "historic" methods of canceling student debt for millions of Americans after President Joe Biden's original plan was struck down by the U.S. Supreme Court last year, Sen. Bernie Sanders on Tuesday led members of the Democratic caucus in submitting a public comment with suggestions for strengthening the new proposal.
"We support the department's efforts to provide significant pathways to relief for student loan borrowers. These efforts are critical, especially in the wake of the Supreme Court's extreme, overreaching decision to strike down the Biden administration's original student debt relief plan," wrote the senators, including Sens. Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.), and Cory Booker (D-N.J.).
The administration's plan—which would entirely wipe out the student loan debt held by 4 million people, provide at least $5,000 in debt relief to 10 million borrowers, and eliminate the interest of 23 million more—the letter states, "would undoubtedly eliminate the crushing student debt burden for borrowers who have long been waiting for needed relief."
But with 43 million people in the U.S. owing a collective $1.6 trillion in federal student loans—an amount that has prevented many from purchasing homes, starting businesses, and having families—the senators said the government must "act boldly so that the tens of millions of Americans who are struggling to pay the rent, put food on the table, and pay for the basic necessities of life are not crushed by a mountain of debt for getting a college education."
The lawmakers proposed:
- Eliminating all of the excess interest that has accrued over what a person originally borrowed, regardless of the repayment plan they are on or what their income is;
- Discharging debt for borrowers who have been in repayment for over two decades on a rolling basis, so no borrower has to delay or forego retirement because of their student loan debt;
- Providing relief to borrowers who have been victims of servicing errors or misconduct; and
- Providing debt relief to every eligible borrower automatically.
Eliminating excess interest would "help millions of borrowers get off the never-ending treadmill of student loan repayment and help them make progress toward eliminating their debt," said the senators. "Student loan debt should never be a life sentence."
Sanders (I-Vt.) and his colleagues also recommended full debt cancellation for borrowers who have repaid enough debt to cover their original principal, regardless of their income.
The lawmakers urged the Department of Education to promptly release its proposed final rule for debt relief for people experiencing economic hardship, which could "provide needed relief to borrowers not otherwise captured in this proposal."
"Every day spent without relief is another day borrowers experiencing economic hardship face unnecessary financial burdens," reads the letter.
The Biden administration has said it plans to finalize its student debt proposal by this coming fall, when Americans will vote in the general election. Former President Donald Trump, the presumptive Republican nominee, has opposed student debt cancellation.
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FAA Bill Includes 'Test Flight' for Banning Student Loan Forgiveness
"If Congress will stop debt relief for pilots now, they'll do it to nurses tomorrow, teachers the next day, and social workers the day after," campaigners said.
Apr 04, 2024
Campaigners have issued a "red alert" over language included in the 2024 Federal Aviation Administration Reauthorization Act that could pave the way toward banning student loan cancellation.
The current draft of the routine bill bars executive branch officials from cancelling or forgiving student loans taken out to pursue flight training or education at the undergraduate level, the Debt Collective warned on Wednesday.
"They're trying to make relief illegal," the group posted on social media.
"Student debtors and their allies need to stick together and stick up for each other."
Buried 1,000 pages in, the language flagged by the Debt Collective comes under the heading, "Prohibition on mass cancellation of eligible undergraduate flight education and training programs loans."
"The secretary, the secretary of the treasury, or the attorney general may not take any action to cancel or forgive the outstanding balances, or portion of balances, on any federal direct unsubsidized Stafford loan, or otherwise modify the terms or conditions of a federal direct unsubsidized Stafford loan, made to an eligible student, except as authorized by an act of Congress," the text reads.
The Debt Collective named Sen. Chuck Schumer (D-N.Y.), Rep. Hakeem Jeffries (D-N.Y.), Sen. Maria Cantwell (D-Wash.), Sen. Tammy Duckworth (D-Ill.), and Rep. Rick Larsen (D-Wash.) as particularly responsible for the language.
"Forty-five million student debtors need to see this and get very, very loud," the group said.
While the language only prohibits the executive cancellation of a certain subset of loans, experts and advocates warned lawmakers would not stop there.
"Make no mistake, this is a test flight," author and Debt Collective co-founder Astra Taylor wrote on social media. "If they can make student debt cancellation illegal for some people, they will do it for others. Student debtors and their allies need to stick together and stick up for each other."
Taylor urged anyone concerned about the language to contact the legislators flagged by the Debt Collective.
The Debt Collective called the language a "test run."
"If Congress will stop debt relief for pilots now, they'll do it to nurses tomorrow, teachers the next day, and social workers the day after," the group said.
Former Ohio state Sen. Nina Turner, meanwhile, called out the lawmakers for hypocrisy.
"The same members of Congress who had PPP loans forgiven, want to make it illegal to cancel student debt," Turner wrote on social media, referring to the pandemic-era Paycheck Protection Program.
The question of who has the authority to cancel student loan debt has been a major stumbling block for the Biden administration's efforts to tackle the issue. The U.S. Supreme Court struck down President Joe Biden's student loan forgiveness plan in June 2023, arguing in part that the administration did not have the authority to forgive as much debt as it had without authorization from Congress.
Despite the ruling, the administration has found ways to forgive $143.6 billion for almost 4 million borrowers, though that's only a fraction of more than $1.7 trillion Americans owe in student loans.
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