Biden Promises New Student Loan Relief Following SCOTUS Ruling

The classic career catch-22: if you want a job, you'll need to go to college; but to go to college, you'll need a job. But working and going to school at the same time can be tough. So you look for another option and find yourself doing what millions of other students do: taking out student loans. What they don't tell you is that to pay off those loans, you'll probably need to work for a long time — maybe even the rest of your life.

The current outstanding student loan debt in the U.S. totals over $1.6 trillion. So while you're definitely not alone, it's not exactly a good thing to share. But what else can you do? And if you can't pay off these loans, what happens? Declaring bankruptcy probably won't solve your problems. Neither will just ignoring the problem and defaulting on the loan. Can anyone save you?

Biden Promises Relief

Just when it seemed that all hope was lost, Joe Biden promised to come to the rescue. In the run-up to 2020, the then-presidential candidate vowed to eliminate all student debt for students attending public universities (or private HBCUs and MSIs) and coming from families earning less than $125,000; for everyone else, he would eliminate $10,000.

After winning the election, President Biden more or less followed through with his promise by creating a three-part plan to target the student debt crisis. Using the 2003 Higher Education Relief Opportunities for Students (HEROES) Act as authority, this new program promised to provide a one-time cancelation of $10,000 for student loan holders earning less than $125,000 as single earners or less than $250,000 as married couples.

SCOTUS Says 'No'

Just when hope was on the horizon, various Republican states filed suit to challenge the program as unconstitutional. The issue eventually made it to the U.S. Supreme Court, in the case of Biden v. Nebraska. SCOTUS found that the program was an overreach of authority by the Biden Administration.

More specifically, Chief Justice Roberts, writing for the 6-3 majority, stated that the HEROES Act did not grant the authority to the Biden Administration in canceling student loan. Rather, the majority found that HEROES Act only authorized the Secretary of Education to make waivers or modifications to student loan debt. It did not give the Secretary the power to all-out cancel the debt; a decision of that magnitude would require an act of Congress.

Biden Tries a New Tactic

Undeterred by SCOTUS's decision, President Biden soon issued a new plan to combat student loans. Instead of acting under the authority of the HEROES Act, President Biden's new plan would work to create new relief programs under the authority of the Higher Education Act of 1965. Unlike the HEROES Act, the Higher Education Act specifically states that the Secretary of Education has authority to compromise and settle student loan debt. Now, it is up to the Secretary to draft new regulations.

What Does This Mean for You?

Your guess is as good as anyone else's at this point. Regulation changes are often slow, given the various administrative law hoops to jump through, meaning it could be a long time before this issue is solved. Given that the 2024 election is right around the corner, student loans will continue to be a major policy issue that is discussed and debated — and hopefully, one day, solved.

Related Resources

• 5 Tips to Consolidate Student Loans (FindLaw's Law and Daily Life blog)
• Student Loans: Legal Information You Should Know (FindLaw's Learn About the Law)
• Browse Bankruptcy Lawyers by Location (FindLaw Learn About the Law)