Joe Biden’s New Debt Forgiveness Plan, Explained

The Higher Education Act of 1965 is more permissive than the HEROES Act but still has limits.

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Wisdom Cole with the NAACP leads student debt relief activists in a chant in front of the White House after the U.S. Supreme Court struck down President Joe Biden's student debt relief program on June 30, 2023. (Photo by Anna Moneymaker/Getty Images)

The Biden administration isn’t giving up on finding a way to forgive potentially hundreds of billions of dollars in student loans to tens of millions of Americans. 

The Supreme Court’s recent ruling in Biden v. Nebraska means the president has no authority under the Higher Education Relief Opportunities for Students Act of 2003 (HEROES) Act to forgive more than $400 billion of student loan debt. But immediately after the ruling President Joe Biden announced he will now pursue the same goal using the Higher Education Act of 1965 (HEA).

What is the Higher Education Act?

President Lyndon Johnson signed the HEA to increase access to higher education in a job market that increasingly required college degrees. It authorized several federal funding programs dedicated to expanding the quality and affordability of higher education through student loans, scholarships, and grants, including the Pell Grant, which aids undergraduate students with “exceptional financial need.”

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  1. Avatar photo
    Julie from Texas

    I'm so tired of government executives (governors and the president) doing things they know are unconstitutional but with the hope that they can get away with it. Oftentimes, it's not even something they see as necessary for governance but rather pandering to their voters. Let's hope this one gets struck down by SCOTUS as well.

    Thanks for covering the topic so well. Great article.

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    Ben Connelly

    This is just ridiculous. Biden is shameless.

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  3. Patrick E

    Dealing with the cost of higher education by just forgiving existing student debt is like trying to deal with the illegal immigration problem with mass amnesty. It does nothing to address the root cause, and will pretty much guarantee we're right back in the same situation within a few years.

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  4. Neelthakrebew

    Congress—which typically holds the “power of the purse”

    Okay. Please tell me when Congress does not hold the power of the purse according to the US Constitution. I will wait patiently.

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  5. Drussell2337

    Meanwhile, college costs increases have consistently outstripped inflation for decades.
    Want to see support from a broad swath of voters? Go after this. There are lots of ways to incentivize cost reductions in higher ed - we just need the political willpower to try some of them.

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  6. Avatar photo
    Retired Prosecutor

    Doesn't anyone realize that if the Administration forgives the outstanding student debt once, there will be little to no incentive for future borrowers to pay student loans in the future? After all, if you've forgiven (in reality transferred to taxpayers) the debt once, aren't future student debtors going to claim they are entitled to the same treatment?

    It's called moral hazard.

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  7. Austin from Atlanta

    I am not a political bomb thrower by nature, but I sincerely believe Biden should be impeached over the blatant disregard for his oath to "support and defend" the constitution. First, he nakedly continued the eviction moratorium, fully aware it was unconstitutional, just because he know it would buy an extra month while the case went back to SCOTUS for a second time. Having already admitted he did not have the authority to unilaterally forgive loans, he's already tried once anyways and failed. Attempting it yet again, knowing that SCOTUS, Congress, and his own conscience are not aligned, is a blatant disregard for his oath of office. For that reason, he has forfeited his mandate for the office.

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    1. Joe1776

      I think Biden is unfit for office. However impeachment is only for high crimes and misdemeanors. The hard truth is we are a democracy and if we want people in office that respect the constitution then we need to elect those people.

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      1. Austin from Atlanta

        What you are speaking to is a classic case of language evolving over time. "High crimes and misdemeanors" was a broad and commonly used phrase at the time of the founding. Taking an originalist view shows that the founders quite explicitly thought of impeachment being for abuse of power and chose a colloquialism that did not survive a quarter century.

        Impeachment is an inherently political process designed to keep the branches of government in check. Truth be told, I think there's a rational argument for every president of my lifetime to have been impeached when they violated their oath, with some cases stronger than others. Biden's case most clearly tramples upon the separation of powers, which is why I think a healthy or rational Congress would remove him.

        I fully agree with you that the American people should make better choices at the polls.

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        1. Avatar photo
          PaulH

          Yes, the first Trump impeachment was about abuse of power (not a particular crime), so there is certainly precedent for impeachment on that basis.

          I think it is an interesting question whether impeachment is the appropriate remedy where the action was checked by judicial process. OTOH, If the Court had found that no one had standing to sue, then impeachment would have been the remaining option (though conviction would have been impossible).

          As a political matter, I don't think impeachment would play well and Republicans would be better off just eliminating the possibility of broad based debt-forgiveness as part of the budget process.

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          1. Austin from Atlanta

            Basically agreed with your analysis. Cheers!

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    2. MathewA

      agreed that would be nice if we started holding elected officials to their oath of office (and yes Trump should have been impeached as well)

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  8. R. James

    The President needs to stop usurping the power of Congress and get the Democrats in Congress to pass a bill for debt relief. The People's representatives deserve a say on the matter.

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  9. Avatar photo
    Whm3113

    The program being proposed is a modification of an existing program. The Income Contingent Repayment plan allows borrower to reduce their monthly payments based on their income. The modification is to change the formula used to determine the payment amount, significantly reducing the payment. In addition, under the existing program, if the borrow had not repaid the loan after 20 years the remainder of the loan would be forgiven. Under the proposed modification that moves to 10 years. Because the Secretary has the authority to modify the payments, and has done so for a long time already, the courts will likely not see any cause to step in.

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    1. Austin from Atlanta

      "[T]he courts will likely not see any cause to step in." Well, they will step in because of the lawsuits.

      I suspect that Roberts' logic from the previous ruling would apply just as equally to the scenario you outline above: "'Modify,' in our view, connotes moderate change. It might be good English to say that the French Revolution 'modified' the status of the French nobility, but only because there is a figure of speech called understatement and a literary device known as sarcasm."

      The major questions doctrine will lead the courts to insist on Congressional consent, which becomes even more needed knowing the administration has already attempted the process once and is now looking for the next best alternative to brush over the separation of powers.

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  10. Clark.Monson

    Thank you for the explainer. The Dispatch really is head and shoulders above its competition when it comes to explainers.

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