During the final stages of the Biden administration, two of the most important student debt relief programs will take their place in the nation’s law books, ready to be made available formally. They are intended to provide massive relief for millions of borrowers, and both are now under the final review stage at the Office of Management and Budget. If approved, these programs will initiate a second effort by the administration to relieve the burdens of student loans following earlier setbacks in court.
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The two new programs: Plan B and targeted relief for financial hardship
The very first program, widely dubbed “Plan B,” promises to bestow upon borrowers widespread loan forgiveness under the auspices of the Higher Education Act. This is somewhat of a reaction to the Supreme Court’s ruling that the administration’s first stab at letting go of a huge chunk of the debt held by students through executive action violated their constitutional authority. Plan B will target the nearly 23 million borrowers, especially those who are struggling maximally with what their balances have incurred as interest when a loan is issued.
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The second scheme is to provide relief to a pool of approximately 8 million borrowers who are very likely to default because of economic hardship. The other initiative has proposed one-off debt forgiveness for those who are predicted to have over an 80% chance of default based on predictive modeling. Supporters of the initiative say it gives the much-needed help to the very most vulnerable borrowers. Opponents, such as Rep. Virginia Foxx, R-N.C., dismiss it as untenable and unfair to the taxpayers.
“If only this administration took half of the time spent in promoting illegal free college agendas addressing root causes of our broken system in terms of student loans, college costs would be lower,” Foxx said.
Though the controversy has played out thus, the setting of Biden administration policies is still firm on those steps. The expected increased litigation challenges would involve most authorities, if experts like Madison Doan from the Heritage Foundation are to be believed as saying courts would strike down efforts like these, given the precedents found in the rulings above from the Supreme Court as well as in the recent abolishing of Chevron deference.
Broader implications and the path forward
Another income-driven repayment plan is also being looked at by the administration, alongside the two debt forgiveness programs. The revision includes measures to cover what were legalistic flaws from the past and safeguards that would prevent default through adjusted repayment terms for borrowers. However, it could take several months into the next presidential term before that rule finally becomes effective. Its future remains an open question: President-elect Trump has obliquely signaled plans to open up the federal student loan system to reform but has been reticent as to uncovering details of how his presidency would affect Biden’s debt relief policies.
Critics include legal experts, who say that because such major policies are being decided by executive rulemaking, the appropriate course would be to seek legislative approval. “Publishing a rule might be easier than enacting legislation, but it comes at the cost of undermining a more stable solution on debt relief,” said Chad Squitieri, a law professor at the Catholic University of America.
Preference to govern by executive rule has been accompanied by the heaviest policy-making tactic from the Biden administration: the record-breaking filling of over 96,000 pages in the Federal Register by December 3, 2024. While allowing the administration to escape congressional gridlock, these actions only expose huge policy initiatives, such as student loan forgiveness, to increased levels of legal scrutiny in the future.
As the two programs stumble toward their last hurdle, the clock begins to tick. Borrowers, activists, and policymakers are holding their breath to see whether the programs can withstand the legal challenges and political obstacles that lie ahead.
The outcome will not only shape the future of student loan relief but also set a precedent for how far executive authority can stretch in addressing systemic issues without legislative backing.
