The Biden administration is quietly preparing for the possibility that the Supreme Court will strike down its controversial student loan forgiveness plan later in June, according to a Wall Street Journal report.
The White House’s public position is that it expects the court to uphold the debt cancellation package, but several administration officials have conveyed private doubts about its prospects of survival upon review, according to the report. Behind the scenes, administration officials are exploring various legal and communications strategies to pursue in the event that the Supreme Court eventually overturns the signature Biden policy, according to the report.
The federal student debt cancellation plan allows for millions of individual borrowers to cancel up to $20,000 in federal student loan debt as currently constructed. The court’s majority signaled its critical attitude of the sweeping policy action in oral arguments in February 2023, according to the report.
Observers anticipate that the Supreme Court will issue a ruling on the debt cancellation plan later in June 2023, according to the report. Biden administration officials privately have discussed more precisely targeted policy alternatives to the current plan, according to the report. However, it is unlikely the president and his staff will be keen to engage in another similar protracted legal battle should the administration opt to try a different legal approach to widespread student debt cancellation, according to the report.
The administration is quietly preparing to respond to a potential Supreme Court strike down with explanations of other strategies the administration is pursuing to provide relief to borrowers, the report continues. These preparations come on the heels of the bipartisan debt-ceiling negotiations, a condition of which included the resumption of student loan payments by Aug. 29 of this year.
After that date, the administration is planning to establish a three-month grace period for borrowers who miss payments so that they will not immediately be considered delinquent to the detriment of their personal credit, according to the WSJ report. Administration officials have informed companies that process the affected loan payments of the plan for the grace period, but have not yet received other guidelines from the Department of Education (DOE) which were supposed to have been delivered in April, according to the WSJ report.
The DOE is also considering options to work around a prospective Supreme Court slap down, seeking to expand targeted debt cancellation already available to disabled borrowers and public servants, according to the WSJ report. Additionally, the White House is making plans to highlight its proposed alterations to income-based payment options which the administration is to finalize by year’s end, according to the same report.
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