US President Joe Biden, on Friday, announced new measures to provide student loan relief to Americans as he condemned the US Supreme Court’s decision to strike down his plan to cancel over USD 400 billion in student loan debt which was a popular move with his voters. The conservative-leaning court rejected Biden’s plan to cancel some of the student debt for millions of people. Biden announced that his administration would pursue student loan relief through the High Education Act and also create a temporary 12-month “on ramp” to repayment.
According to the US President, temporary 12-month “on ramp” repayment will temporarily remove the threat of default or having a student's credit harmed.
The act gives the secretary of education the authority to “compromise, waive, or release any right, title, claim, lien, or demand, however, acquired, including any equity or any right of redemption”, the New York Times reported.
While speaking to the media, Biden said his administration would pursue a different way to achieve his goal.
"I believe the court's decision to strike down my student debt relief program was a mistake. I'm not going to stop fighting to deliver borrowers what they need, particularly those at the bottom end of the economic scale," he remarked, as per news agency PTI
The US president also said that his administration’s student debt relief plan would have been the lifeline tens of millions of hardworking Americans needed as they try to recover from a once-in-a-century pandemic.
US Supreme Court Says ‘Law Stretched Too Far’
On Friday, in a lawsuit brought by Republican-controlled states, the six Republican-appointed justices ruled that the administration had stretched that law too far, New York Times reported.
It stated that over the last half-century, the student debt held in the US has skyrocketed as the cost of higher education has continued to rise, growing faster than most household expenses.
“More than 45 million people collectively owe USD 1.6 trillion — a sum roughly equal to the size of the economy of Brazil or Australia.” Chief Justice John Roberts said in the decision that a “mass debt cancellation program of such significance required clear approval by Congress,” the PTI report said.
Around 90 per cent of the relief from the plan would have gone to borrowers making less than USD 75,000 a year, and none of it would have gone to people making more than USD 125,000, Biden said, adding that it will be good for Americans and their families. It will also be good for economic growth, both in the short and long term.
The White House made it clear that Republicans were to be blamed for stymieing the student loan relief efforts. He further said that they had no problem with billions in pandemic-related loans to businesses including, hundreds of thousands and in some cases millions of dollars for their own businesses but refused to support student debt relief.
The US president said that the country shouldn't overlook the progress made such as forgiving loans for teachers, firefights, and others in public service and creating a debt repayment plan which will require an undergraduate to pay only 5 percent of the discretionary income.