The Wall Street Journal is reporting that the Biden administration is ready to unveil a new student loan debt cancellation plan that will reduce or eliminate the student loan debts of millions of Americans.
This will be the second attempt by Biden to wave his magic wand and make hundreds of billions of dollars of student debt vanish. The first time, the Supreme Court took his magic wand away from him and laughed in his face.
Will this time be any different?
The first plan, nixed by the Supreme Court last year, would have eliminated up to $20,000 in student debt for borrowers making less than $125,000 a year.
Biden will unveil his next plan Monday in the number one left-wing college town in America; Madison, Wisc. It will be challenged in court, but Biden is hoping that the courts will allow his debt forgiveness program to go forward even while the case is moving up the chain of appeals courts. This will allow Biden to enjoy the political advantages of the program even though it's illegal.
The proposed regulation is expected to outline several categories that would qualify borrowers for debt relief, including financial hardship, the people said. For example, borrowers with high debt loads and low incomes could see their loan balances reduced or eliminated under the plan. It could also outline a path to relief for borrowers who have carried their debt for decades; who now owe more than their initial loan amount because interest has piled up; or who are eligible for relief through other federal programs, but haven’t applied.
Administration officials are developing estimates for how many borrowers could see relief through the plan. Outside experts said the proposal could lower or eliminate student debt balances for millions of people if the administration opts to embrace the most ambitious version of the regulations that have been discussed.
The opposition is already getting ready for a fight.
“It appears that the proposal will be another attempt to circumvent the Supreme Court’s initial ruling to help the President garner votes in November,” said a spokeswoman for Austin Knudsen, Montana’s attorney general.
“[A]s hard-working Americans struggle to buy groceries, Biden thumbs his nose at the court like he has done with so many issues, including immigration, and does what he wants,” Florida Attorney General Ashley Moody said in a statement. “Not only is this unfair, but it violates the separation of powers.”
The administration will attempt to circumvent the Supreme Court's original objections by fast-tracking a change in regulations.
The Higher Education Act requires that the Education Department conduct a so-called negotiated rule-making to develop the regulations, an unusual and slow process that isn’t required for most other regulations. Some in the administration feared the rules would get caught up in the government’s bureaucracy for months, making it unlikely that borrowers would see any relief before the election.
But the administration moved quickly, holding a series of mandatory public meetings in recent months with stakeholders—including borrowers, student loan industry officials and representatives of colleges and universities. That part of the process ended earlier this year, allowing the Education Department to craft the regulations based on the stakeholder feedback.
Even if the Supreme Court rules that these regulations are just as illegal as the last ones, Biden will still get the political benefit among the millions of borrowers because many debtors will see relief. It's Biden's most outrageous violation of the separation of powers to date, and all we're hearing from the "gatekeepers of the republic" are crickets chirping.
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