White House and House Republicans React and Respond to SCOTUS Student Debt Forgiveness Decision with Competing Approaches

July 5, 2023

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By: Francine E. Friedman, Derrick Stanfield (Public Policy Specialist)

Following the Supreme Court’s June 30, 2023 ruling determining that the Biden-Harris administration did not have authority to carry out its student debt forgiveness plan, the administration released a fact sheet detailing new actions to provide debt relief and support for student loan borrowers.

On June 30th, Secretary of Education, Miguel Cardona, announced the initiation of a rulemaking process to provide debt relief using his authority under the Higher Education Act (HEA). This process is likely to take much longer than the initial plan but it still seeks to serve working and middle-class borrowers.

The Department of Education also finalized the Saving on a Valuable Education (SAVE) repayment plan and instituted a twelve-month “on-ramp” for repayment that allows borrowers who miss payments to avoid facing the associated consequences when repayments begin in October. President Biden’s second attempt at student loan debt relief is likely to face similar legal challenges but the administration has expressed confidence that the new plan is constitutionally sound.

As stated in our previous blog post, mixed reactions to the Court’s decision from members of both parties were expected. House Education and Workforce Committee Chair Virginia Foxx (R-NC), along with Reps. Burgess Owens (R-UT) and Lisa McClain (R-MI), have introduced the Federal Assistance to Initiate Repayment (FAIR) Act. This bill is a Republican alternative to the administration’s overturned proposal and seeks to create a new income-driven repayment plan while limiting the authority of the Secretary of Education related to the student loan program. House Democrats on the Education and Workforce Committee have not yet issued any statements related to the bill.  It is likely this proposal will not gain any traction in the Democrat-majority Senate and should be viewed as messaging vs actually able to change policy.

The Supreme Court’s decision has revived arguments around the rising cost of higher education and burdensome student loan debt. As Congress returns from recess, members on both sides of the aisle will likely continue to comment and attempt to take action on the matter.  With a divided Congress, however, finding middle ground is unlikely. The Biden administration has also indicated it remains steadfast in its goal of providing relief to working and middle-class borrowers despite the Supreme Court’s ruling and criticism from Republicans.

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