Photo courtesy of LLs via Wikimedia Commons.
By Emily Bisson ʼ27
Contributing Writer
The Biden-Harris administration may have finally found a way to implement large-scale loan forgiveness for college graduates. Since his 2020 campaign, President Joe Biden has promised to forgive loans taken out by American students pursuing higher education in the United States.
President Biden’s actions towards these campaign promises have been blocked by the Supreme Court, which ruled that he did not have the constitutional authority to carry out his debt forgiveness plan. The Biden-Harris administration has since been working to forgive student loans, finding some success through the Saving on a Valuable Education plan, or SAVE, and canceling nearly $138 billion in loans.
Another plan that has achieved significant loan forgiveness is the Borrower Defense to Repayment plan, which offers relief for students who were harmed or misled by their educational institution. However, these plans have been challenged in court.
On April 4, the Borrower’s Defense to Repayment plan was blocked in the Fifth Circuit Court of Appeals based on legal challenges brought forth by a group of Texas schools. The SAVE plan has also faced lawsuits from a group of GOP-led states who hoped to halt new regulations from being implemented in July 2024.
Despite these many legal challenges, the Biden-Harris administration has continued to search for a way to legally implement student loan forgiveness on a larger scale and may have finally found a way to do it. Biden visited Madison, Wisconsin, on April 8 to unveil a new plan that may significantly reduce or even eliminate loans for many more college graduates.
President Biden’s first attempt at wide scale student loan forgiveness came in August 2022. A memo to the Secretary of Education by the Department of Education’s General Counsel, Lisa Brown, explained that the 2003 Higher Education Relief Opportunities for Students, or HEROES Act, authorized the creation of a program to cancel loans in the wake of the COVID-19 pandemic.
The HEROES Act was created after the World Trade Center attacks on September 11, 2001, and allowed the Secretary of Education to “waive or modify any requirement or regulation applicable to the student financial assistance programs.” Due to the COVID-19 national emergency, Biden hoped to use this act to forgive student loan debt.
According to the New York Times, this plan was ruled unconstitutional by the Supreme Court, which decided that the president had exceeded his authority. According to the Supreme Court, only Congress, not the president, has legal authority in the constitution to implement laws and policies such as this loan forgiveness plan.
This is outlined more specifically in the Property Clause of the Constitution, which states that “Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.” In April 2024, President Biden proposed a new plan, offering an alternate path for him to further fulfill his campaign promise.
The New York Times reports that this new plan will target five specific groups of students to receive loan forgiveness: graduates whose loans have significantly increased because of interest rates, those who have been paying for multiple decades, those facing significant economic hardship, those who qualify for debt forgiveness programs already in place but have not applied, and those who have used loans to pay for an institution which has since been denied certification or is no longer eligible for federal aid.
By targeting these specific groups, the Biden administration hopes to prevail over the legal challenges the plan will face in the coming months.
Instead of the HEROES Act, this new plan relies on the Higher Education Act, which authorizes the Secretary of Education to forgive student loans in specific situations, AP News reported. The New York Times reports that if the plan holds up against legal challenges, it could eliminate debt for over four million graduates and reduce loan amounts by at least $5,000 for 10 million more.
However, this new plan is already facing questions from states that have challenged President Biden’s earlier attempts at loan forgiveness. While the Biden administration argues that this forgiveness plan could reduce financial burden for many young Americans, CNN reported that many Republicans argue this new plan is an attempt to give free money from taxpayers to college graduates who chose to pursue a degree, and that money for loan forgiveness should not come out of taxpayer money and increase federal debt.
While this new plan will not affect students currently pursuing a degree, these advancements have become increasingly relevant in recent years, as college tuition has continually increased across the country. The New York Times reports that in fall 2024, tuition at some institutions will reach a record high. Vanderbilt University became the first school to reach a historic landmark, announcing that tuition will total $100,000 for some students in the fall semester.
This rise showcases a disturbing trend affecting universities across the country, including Mount Holyoke College, which recently announced a significant increase in tuition for the upcoming academic year.
First-years Liliane Guerrera ʼ27 and Zivaishe Jaravaza ʼ27 shared their concerns about the amount of debt they may face after graduating from Mount Holyoke in four years. “It makes you worried,” Jaravaza shared, “because if they keep raising tuition every year, what's the end point when we're in our senior year? How much will we be paying then?”
Although she may not owe much now, Guerrera expressed how the accumulation of interest is what concerns her the most, as she will not know exactly how much she owes until after graduation.
While this fear may seem commonplace for American students, other countries do not face the same issues with student loan debt. While President Biden is scrambling to forgive huge amounts of student loans, students in other countries are attending college for free.
Jaravaza, who attended school in Australia, South Africa, and Zimbabwe, shared her insight on this topic. She explained that in Australia, students pay for college with a program called HECS-HELP. This fund pays for students to attend and graduate college. They do not need to start making payments on these interest-free loans until they start earning over the compulsory repayment threshold, which is approximately $51,000 in 2023-24.
While choosing to come to college in America has placed more of a financial burden on her family, Jaravaza explained that the caliber of higher education in the United States is worth it for her future, and allows her to have more of a choice in the degree she pursues during her time at Mount Holyoke.
Both students wrapped up the conversation by expressing their concern over where this extra tuition money will be spent. Guerrera voiced her anxiety over the College’s plan to cut departments while simultaneously raising tuition. She added that she believes colleges across the country are increasing tuition to label themselves as more prestigious and desirable institutions for incoming students. “I don’t want to be in debt. I fear debt,” she said, voicing her general concerns.
While President Biden’s new plan may not directly affect current Mount Holyoke students, if this plan passes and takes effect, it may mean that students will see similar plans enacted in the future. As the United States continues to face increased tuition prices in both public and private institutions of higher education, Biden’s new plan may offer hope to students feeling anxious about facing a future burdened by student loan debt.