It Doesn't Matter if SCOTUS Kill Biden's Student Loan Relief Plan- He's Got a Better Backup Coming in to Place
In January, he released regulations that will completely wipe out loan repayment costs for millions- and slash them for almost everyone else
I think the Biden administration always knew the US Supreme Court was going to take out his loan relief plan.
But proposing it drew the political fire of political opponents and their legal attacks, letting him quietly advance the administration’s regulations - released in January - to radically revamp income-based repayment plans that will eliminate or slash repayment costs for nearly every graduate far beyond the loan relief plan.
Instead of just a $10K or $20K drop in loan burdens, the Biden administration estimates it will eliminate 40% of student debt payments - and 83% for low-income students. Here are the key details:
Monthly payments for undergraduate loans will be capped at 5% of a borrower’s discretionary income
The key phrase here is “discretionary income” since that means loan holders pay 5% only on amounts they make beyond their core living expenses.
What this means is individuals making less than $30,600 or those in a family of four making less than $62,400 will pay NOTHING, $0, in loan payments.
Unlike some past repayment plans, there will be no increase in interest on balances leftover because of interest costs.
Any debt remaining is completely eliminated after 20 years - and eliminated in 10 years for those with initial debt burdens under $12,000 (ie. most community college graduates).
Here’s how the plan plays out for folks in different income and family situations, according to a White House infographic:
I hate the term “11-dimensional chess” since most of the time people are talking about just plain chess, the basic idea that you make a move, possibly sacrifice a piece, then put in place an even stronger attack.
That’s what Biden did with his initial loan relief plan, then following up with this more comprehensive, radical plan for revamping student loan repayments.
By the time the Court takes out the loan relief plan, the new system will be in place. No doubt the right-wing will try to have the courts throw the new plan out, but I suspect John Roberts and probably at least one other Justice won’t have the political appetite to further alienate a generation of students with another whack at the issue, especially since income-based loan repayment plans have clearer, long-term statutory authority.
The Supreme Court is about to exhaust a lot of political capital and prestige killing off the loan relief plan with Biden (and student loan borrowers) ending up having the last laugh.
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