White House Under Pressure to Develop a 'Plan B' on Student Debt

The Biden administration is under pressure from Capitol Hill lawmakers and student debt advocates to develop contingency plans to cancel billions of dollars in student debt and to move forward quickly if the Supreme Court strikes down the administration’s initial executive action.

One alternative would involve swapping out the current legal rationale for a new one, according to two people familiar with the discussions.

When President Joe Biden announced a sweeping package of student-debt relief in August, the administration leaned on a 2003 law, called the Heroes Act, for legal authority, arguing it could cancel as many as 40 million debt cases due to the financial hardships caused by the Covid-19 pandemic.

But the Department of Education in the past — including in settlements with for-profit colleges — has relied on entirely different legal arguments as the basis for loan cancellation. Now, administration officials, lawmakers and advocates are informally examining those alternative arguments as a way to push ahead on an issue that’s become wildly popular with young, liberal voters and people of color. One person familiar with the plans stressed the discussions are fluid.

The White House has said it is confident in the soundness of its legal argument and expects to prevail, even if outside legal experts are skeptical the conservative-leaning court will rule in their favor.