Why the White House thinks new student loan plan will hold up in court

The White House on Friday argued the new pathway for student loan forgiveness is valid, legal and should be able to hold up in the Supreme Court.

Hours after the court struck down his initial effort to provide debt-ridden students with relief, Biden reintroduced a program to cancel up to $20,000 in student loan debt.

The new effort is grounded in the Higher Education Act (HEA), unlike the first effort rooted in the Higher Education Relief Opportunities for Students (HEROES) Act, which the administration argued they could use due to the national emergency established during the COVID-19 pandemic.

When the Supreme Court struck down the program Friday, Chief Justice John Roberts wrote in the court’s majority opinion that the HEROES Act does not grant the authority to provide student debt relief.

He invoked the so-called “major questions doctrine,” which the court uses to require that Congress give clear authorization for the executive branch to implement matters of vast economic and political significance.

White House officials argued Friday that the HEA route is more likely to hold up against that doctrine. Democrats and advocates have argued the HEA would allow the education secretary to compromise, waive or release student loans.

“From where it stands now, we think the … Higher Education Act pathway that we talked about today is going to be a valid pathway that conforms with the major questions doctrine issue that the Supreme Court raised today,” said Bharat Ramamurti, deputy director for the National Economic Council.

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More on SCOTUS’s student loans ruling from The Hill

• Supreme Court strikes down Biden’s student debt forgiveness plan
• Supreme Court blocks student loan forgiveness: What should borrowers do now?
• Biden plots new course to get relief for student loan borrowers
• Biden bristles at reporter asking if he gave student loan borrowers ‘false hope’
• READ: Supreme Court rulings on Biden’s student loan forgiveness plan

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Education Secretary Miguel Cardona told reporters that lawyers from his agency, the Department of Justice and the White House reviewed the new plan, weighed in, and believe the HEA pathway was legally available. But, he added, those lawyers did the same review before Biden introduced the program citing the HEROES Act.

When pressed on why the administration is confident the alternative pathway would meet a conservative Supreme Court’s muster, the officials reiterated that they want to fight for borrowers.

“We’re going to fight, we’re going to keep fighting,” Cardona said. “We’re going to put the best legal argument forward.”

Officials expressed confidence in this new pathway, while not making clear the full extent of why they believe this legal case can hold up in the conservative-leaning court when the other didn’t. It is sure to be a target of Republicans again, despite the new justification for the program.

Their optimism was reminiscent of when Biden said in March he was confident in the legality of his original plan, though he said at the time he wasn’t confident in the outcome of the Supreme Court decision.

Biden directed his team to look at all available legal options for student debt cancellation when it became apparent the conservative-leaning court would strike down his plan, officials said Friday. This pathway is the “fastest way to provide relief,” Ramamurti said.

“That’s what we’re going with now. We think it’s legally available,” he added.

The new HEA path will require a public comment and notice period before it could go into effect, and the process could go to the end of 2023. The Education Department sent out a notice Friday, the first step in the “negotiated rulemaking” process, and the first public hearing on the matter will happen July 18 to get input from stakeholders.

In the meantime, the White House stressed it was “taking action on multiple fronts to help” borrowers after the Supreme Court ruling.  

Advocates have groaned for months that the whole process has created confusion for borrowers, who are unsure when payments would resume and whether they will have some cancellation.

Biden on Friday disputed the suggestion that he gave student loan borrowers “false hope” when his program was struck down. He added that he thought the Supreme Court “misinterpreted the Constitution” with their decision.

The president announced a 12-month on-ramp for borrowers struggling to restart their loan repayments when they resume this fall.

While interest will start accruing again for borrowers in September, the action is intended to 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.

Student debt payments have been paused since March 2020 due to the pandemic, but in a deal with House Speaker Kevin McCarthy (R-Calif.) to secure a debt ceiling agreement, Biden set in stone the resumption of repayments beginning in October.

Cardona noted the on-ramp action is not an additional pause extension. The Biden administration has been criticized by Republicans for continuing to extend the repayment pause until he struck the deal limit deal this spring.

“This on-ramp is intended to support you, making it back to repayment with dignity,” Cardona said. “This on-ramp is not a loan pause, it is a process in which we are going to support our borrowers … but we encourage payments to be made.”