Two new student debt relief programs from Biden barrel toward imminent release

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As the Biden administration enters its final days, two new student debt relief programs face imminent release as they undergo final review before formal implementation.

The two programs include a second attempt at providing sweeping student loan forgiveness for millions of borrowers under the Higher Education Act, known colloquially as "Plan B," which comes after federal courts ruled that the Biden administration's initial attempt at providing broad-based student loan forgiveness via executive action was unconstitutional. The second program, focused on people facing financial hardships, seeks to provide student debt relief for millions more.

The two programs were submitted for review to the Office of Management and Budget as of Tuesday, one of the final steps before the policies are formally published in the Federal Register.

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An image of protesters calling on the Biden administration to cancel student loan debt next to an image of the Supreme Court. (SoFi and Getty Images)

After the Supreme Court blocked the Biden administration's first attempt at providing broad-based student loan forgiveness, ruling it was an overreach of the executive branch's authority under the Constitution, the president and his team began working on a new plan. It's "Plan B" seeks to provide relief to roughly 23 million borrowers, in particular those whose outstanding loan balance has been impacted by unrestrained interest accumulation. 

Meanwhile, the second program seeks to provide additional student loan forgiveness for 8 million borrowers who face financial hardships. If finalized, the new rule would authorize student debt forgiveness on a one-time basis for people who the department considers to have at least an 80% chance of defaulting on loans based on a "predictive assessment using existing borrower data."

Rep. Virginia Foxx, R-N.C., chair of the House Committee on Education and the Workforce, sent a letter to the Biden administration earlier this month slamming its efforts as a "Band-Aid that forces taxpayers to shoulder the responsibility of paying off someone else’s debt."

"If this administration spent half as much time working to address the root causes of our broken student loan system as peddling this illegal free college agenda, college costs would be lower," she said.

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Rep. Virginia Foxx speaks at a news conference in the Capitol Visitor Center. (Tom Williams/CQ Roll Call)

Meanwhile, Madison Doan, a senior researcher at the Heritage Foundation’s Center for Education Policy, told Fox News Digital that the Biden administration's student debt forgiveness efforts will likely be shot down in court for the same reasons its previous programs have been blocked. She also pointed to the recent ruling that overturned Chevron deference, which previously allowed courts to defer to executive agencies when statutory language, such as that associated with the Higher Education Act, is unclear.

"These precedents make it doubtful that the courts will endorse the administration’s attempt to use ambiguous language in old statutes to justify broad new authority for canceling billions in loans at the expense of taxpayers," Doan said. She also pointed out how two Democratic-appointed judges have indicated that opponents of the rules are "likely to succeed on the merits" of their legal challenges.

In addition to the two programs that are in the final approval stages, the Biden administration is also attempting to push through a new interim rule that, once implemented, will reopen enrollment in an income-driven student debt repayment plan that is currently stalled in the courts. The new rule contains certain changes from the original income driven repayment plan in order to provide protections from the same legal challenges that stalled the initial attempt.

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However, the rule is not slated to go into effect until several months into President-elect Trump's second term, and, as a result, will likely be rescinded. While Trump has not formally laid out plans on how he will approach the Biden administration's student loan forgiveness policies, he has indicated plans to reform the federal government's role in U.S. education during his term.

Student debt relief activists participate in a rally at the U.S. Supreme Court on June 30, 2023, in Washington, D.C.  (Kevin Dietsch/Getty Images)

"The lesson President Biden should have taken from the Supreme Court's student loan ruling was that, if he wanted to forgive debt, he should hammer out a deal with Congress," Chad Squitieri, Catholic University of America law professor, told Fox News Digital. "President Biden's efforts to unilaterally plow forward without Congress, in the waning days of his administration, is just the latest effort to use administrative rulemaking as a substitute for the federal lawmaking process. Publishing a rule might be easier than enacting legislation, but it can come at the cost of undermining a more stable solution on debt relief."

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Executive rulemaking has been a staple for the Biden administration, which has used the policymaking avenue to implement a range of reforms. As of Dec. 3, the Biden administration set a new record for the most Federal Register pages filled in a single year – 96,088. The number puts the administration on pace to fill more than 100,000 pages by the end of its term.