Plan B to cancel student loan debt? The White House won't go there even as pressure mounts
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WASHINGTON – President Joe Biden faces growing pressure to develop an alternative plan to cancel student loan debt for millions of Americans after the executive action he took last year ran into a buzz saw from a majority of Supreme Court justices Tuesday.
The court's conservative majority expressed deep skepticism over Biden's plan to wipe out $400 billion in student loan debt, suggesting the president overstepped his authority during oral arguments in a closely watched challenge of Biden's program.
Some liberal constituency groups and student loan advocates want Biden to work on a backup plan to provide sweeping debt relief given the strong possibility the high court strikes down Biden's plan.
But publicly, the White House won't even entertain the idea of a Plan B, insisting Biden followed the law when he cited a provision in the 2003 HEROES Act that allows the education secretary to “waive” or “modify” student loans during a national emergency.
As the 26 million Americans who applied for student loan cancellation await a court decision likely to come in June, the White House is only willing to talk about Plan A.
Student loan debt forgiveness on shaky legal ground
"Not confident": Even Biden seemed doubtful this week the Supreme Court will uphold his action. “I’m confident we’re on the right side of the law,” Biden told reporters the day after the court hearing. “But I’m not confident about the outcome of the decision yet.”
Authority questioned: Chief Justice John Roberts questioned a central premise of Biden's argument: that the president has authority to cancel student loans without explicit authority from Congress. "We take very seriously the idea of the separation of powers and that power should be divided to prevent its abuse," he said.
Fairness: Roberts' support is likely crucial for Biden to garner the five votes needed for a majority. Yet in another troubling sign, conservatives justices led by Roberts raised what they called "the fairness argument," echoing a common criticism from Biden's opponents that forgiving debt punishes Americans who didn’t attend college and those who already paid off their student loans.
Could standing save plan? The best chance for Biden's plan to prevail could be on standing – that the states suing the Biden administration weren't actually injured by Biden's action and therefore can't sue. Justices Amy Coney Barrett posed several questions on standing, suggesting she could side with the court's three liberals, but one more vote would still be needed for a majority.
"Multiple options": The NAACP's Wisdom Cole, national director of the group's Youth and College Division, told USA TODAY the White House needs to have "multiple options" to make sure debt forgiveness happens if the court overturns Biden. "We need to make sure that we are ready to attack from all angles."
More: Supreme Court's conservative justices signal skepticism of Biden's loan forgiveness plan: Recap
What else could Biden do to forgive student loan debt?
If the high court strikes down Biden's plan, what next? This is the tricky part – and there is no consensus.
White House officials had reservations about the legality of canceling student loan debt before Biden took action in August. Ultimately, in choosing the HEROES Act, Biden's legal team pursued what they thought was the most viable path that could withstand legal scrutiny.
The clearest option to achieve the same goal – forgiving up to $20,000 in student loan debt for low- and middle-income households – would be for Congress to act. But even when Democrats controlled both chambers, canceling student loan debt lacked enough support for passage. Now that Republicans have taken over the House, there's likely no legislative route.
Biden could propose a narrow plan that still invokes the HEROES Act, some legal experts argue.
More: Four takeaways from the Supreme Court's feisty arguments over student loan forgiveness
Others believe Biden could turn to the Higher Education Act of 1965, which Biden and past administrations have cited to provide student loan debt relief to certain categories of borrowers such as teachers and the disabled.
The White House has touted its previous efforts to cancel debt through the Public Service Loan Forgiveness program. However, that approach is only available to borrowers working in the public sector. No existing programs provide comparable relief like that posed by Biden’s plan.
More: 'Not confident': Biden unsure how Supreme Court will rule on student loan forgiveness plan
Instead, Biden might have to revert to smaller steps.
For example, alongside the debt forgiveness plan, Biden introduced a new program designed to more directly tie borrowers' monthly loan payments to their income. The plan, which is still going through the Education Department's regulatory process, would reduce some borrowers' payments to 5% of their discretionary income.
Could a SCOTUS defeat actually boost Biden politically?
While a Supreme Court defeat on student loan forgiveness would certainly be a setback for Biden, it could help him politically.
Biden, who is widely expected to announce a 2024 reelection bid this spring, could point to the Supreme Court blocking student loan debt forgiveness as another example of a court he's argued is part of an increasingly extreme "ultra-MAGA" Republican Party.
The court's Dobbs decision last year, which found no constitutional right to an abortion and overturned Roe v. Wade, energized female voters during the midterm elections, helping Democrats defy headwinds and exceed expectations.
More: As Biden prepares 2024 reelection run, Democrats worry blue-collar voters are slipping away
More:Joe Biden holds off red wave, gets unexpected boost from midterm election
Cristina Tzintzún Ramirez, executive director of NextGen America, the largest young voter mobilization group in the U.S., foresees a similar dynamic in 2024 if the Supreme Court rejects Biden's debt cancelation.
"Blocking progress for 40 million Americans, especially young Americans, on student debt policy to radically transform their lives will be a huge mobilizing factor to turn people out in 2024," she said.
Biden has already warmed up a message tailored for the campaign trail – contrasting his efforts to help Americans saddled with student debt to Republicans passing tax cuts for corporations.
"They’re the same folks who had hundreds of thousands of dollars – even millions of dollars – in pandemic relief loans forgiven," Biden said Monday, "and who voted for tax cuts for overwhelmingly benefit the wealthiest people in America."
More: As Biden prepares 2024 reelection run, Democrats worry blue-collar voters are slipping away
What they're saying
"The White House should absolutely be thinking about how to deliver on student loan relief should the Supreme Court come down with an unfavorable ruling," said Braxton Brewington, press secretary of Debt Collective. He noted 16 million Americans have already been approved under Biden's plan but not gotten relief amid the legal standoff. "Probably more important than having a backup plan is having a backup plan that is executed swiftly."
Paco Fabian, communications director of the progressive-aligned political action committee Our Revolution, said the White House "needs to figure out how to effectively use their executive authorities to deliver on some of the promises they've made." But he acknowledged Plan B might have to be congressional action that would depend on Democratic wins in the 2024 election.
White House press secretary Karine Jean-Pierre, repeatedly pressed about a Plan B, said the White House is focused on the plan before the Supreme Court. "We're confident in our authority," she said. "We never know on any case how the Supreme Court is going to rule."
Some debt forgiveness advocates aren't getting ahead of the court's decision. "I don't think we're in a place yet to talk about a plan B," said Natalia Abrams, president and CEO of the Student Debt Crisis Center. "I think there's just a lot of faith in the administration right now that something will be done."
Given the backlash to the current proposal, it’s understandable that the administration doesn’t want to tip its hand about any Plan B, said Abby Shafroth, a senior staff attorney at the National Consumer Law Center and director of the Student Loan Borrower Assistance Project. But regardless of the court's action, she said something must be done to relieve the debt burden before borrowers are forced to begin monthly payments again.
Not everyone is assuming a Supreme Court defeat, however. Dalié Jiménez, a professor and director of the Student Loan Law Initiative at the University of California, Irvine School of Law, said anxious borrowers should consider that the nation’s high court might not actually kill Biden’s plan. “I think it is important to think about this as: There’s still a possibility this is approved.”
The big picture
Having invested so much in a student loan debt plan tied up in court, the White House isn't eager to talk about possible defeat.
But they might have to pivot.
As a Supreme Court decision draws nearer, millions of student loan borrowers are going to start asking, "What's next?" if Biden loses the fight.
A moratorium on student loan payments – extended multiple times during the pandemic – will come to an end two months after the court's decision.
Without a Plan B, at least 16 million Americans who banked on their debts getting erased might see their hopes dashed.
Contributing: Chris Quintana, Nirvi Shah and John Fritze
Reach Joey Garrison on Twitter @joeygarrison.
This article originally appeared on USA TODAY: Student loan forgiveness at Supreme Court: Biden might need a Plan B
