WASHINGTON (Pakistan Point News / Sputnik - 01st July, 2023) US President Joe Biden said on Friday that he will pursue student loan forgiveness for borrowers in the United States through the Higher education Act, following a Supreme Court ruling earlier in the day blocking the administration's previous student loan forgiveness plan.
"I'm announcing today a new path consistent with today's ruling to provide student debt relief to as many borrowers as possible as quickly as possible," Biden said during a press conference. "We will ground this new approach in a different law than my original plan, the so-called Higher Education Act."
Earlier on Friday, the US Supreme Court struck down Biden's plan to discharge $10,000-$20,000 in eligible borrowers' debt through the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which would cost approximately $430 billion, according to a Congressional Budget Office estimate.
The new path is "legally sound" and will allow the US Department of Education to compromise, waive or release loans under certain circumstances, Biden said.
However, the new approach will take longer, Biden said, adding that he directed his team to pursue the matter with haste.
The Biden administration will also alter its income-based student loan repayment program to require a minimum payment of 5% of disposable income, down from 10%, the president said.
Additionally, the Department of Education is instituting a 12-month "on-ramp" period to defer delinquency, default, credit agency reporting and debt collection referrals for borrowers who miss initial repayments from October 1, 2023 to September 30, 2024, Biden said.
The Secretary of Education has already taken initial steps to launch the new loan forgiveness program by starting a rulemaking process on the matter, Biden said.
Biden denied providing "false hope" to borrowers, when asked about the criticism by reporters. Biden instead claimed that Republicans took away that hope by challenging the plan.
