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.
“They’re going to lose,” Jed Shugerman, a law professor at Fordham University, said in a telephone interview. “There is a consensus that this would lose six-to-three, if not worse.”
In a statement, a White House official said the administration stands by its plan and an alternative is not under consideration. The administration will continue to defend the initiative against Republican and special interest efforts to halt it, the official said.
An official with the Department of Education also said that it was confident that the legal strategy was sound.
Finding a way forward, regardless of the court’s ruling, could be a boost to Biden’s planned 2024 re-election bid. While polling shows mixed support among the overall electorate for student debt relief, young people — who owe more than previous generations — are more likely to favor forgiveness.
Fifty-four percent of voters under 30 years say cancelling $10,000 for low-to-middle-income borrowers would improve the country, according to a Harvard Institute of Politics poll.
Younger Americans turned out at historically high levels and overwhelmingly supported Democratic candidates in the November midterms, proving decisive or strongly influential in several Senate races that helped Biden’s party widen its majority in the chamber.
While it’s unclear whether debt relief ultimately drove turnout, given youth voters ranked other issues such as abortion of higher importance, finding ways to implement the program in the event of an unfavorable court ruling could help Biden, 80, make in-roads with an important voting bloc ahead of the 2024 presidential cycle.
Seeking an Alternative
One approach the administration could take is to rely on the Higher Education Act, a 1965 law giving the Secretary of Education broad authority to manage the government’s portfolio of student loans, according to Smita Ghosh, an appeals lawyer at Constitutional Accountability Center, a progressive think tank.
“President Biden’s authority to provide student debt relief to borrowers is clear,” Democratic Congresswoman Cori Bush said during a virtual press conference earlier this month. “I am prepared to defend the president’s student debt relief plan until every legal solution has been exhausted.”
The administration’s original plan would cancel up to $20,000 in debt for individuals making under $125,000 or households making under $250,000 annually. It also includes changes to the federal income-driven repayment program, cutting monthly payments in half or completely eliminating payments for certain borrowers.
Ron Klain, Biden’s chief of staff who is poised to depart in the coming weeks, has been a force behind administration efforts to forgive student debt for low- and middle-income Americans, viewing the issue as a political winner in key states like Georgia.
More recently, Anita Dunn, a senior adviser to the president, has become heavily involved in the communications and political strategy on student debt surrounding the Supreme Court’s decision.
‘They’re Going to Lose’
Publicly, the White House and advocates continue to say they believe the Supreme Court will uphold their executive action.
“The White House feels strongly their plan will hold up,” said Wisdom Cole, national director of the NAACP’s Youth & College Division.
“We are trying to ensure we’ve done everything we can on student debt forgiveness, and that it’s not done until it’s done,” said Cole, who spoke with administration officials in December about issues affecting young voters.
Shugerman said the administration’s plan would be more resilient to legal challenges if reintroduced under the Higher Education Act, but warned the process would take about a year, potentially bumping up against the end of Biden’s term. “They’re running out of time,” he added.
More than 26 million Americans applied for debt relief before a federal court ruling forced the administration to stop accepting new applications, according to a November statement. Of those applicants, 16 million people have been approved.
The NAACP, labor unions and student debt advocates have planned a rally in front of the Supreme Court for Feb. 28, when oral arguments begin in the case. A decision on the case could come any time between the end of arguments and late June, when the court takes a recess.
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