Progressives Tell Biden He Better Have a Backup Plan If SCOTUS Kills Student Debt Relief

Progressive Reps. Ro Khanna, Ayanna Pressley, and Alexandria Ocasio-Cortez have reportedly urged Biden administration officials to prepare a backup plan to relieve the student debt burden of tens of millions of Americans in case the U.S. Supreme Court strikes down the White House's cancellation plan.

Such an outcome, paired with the looming end of the student loan repayment moratorium, would be an economic disaster with huge political implications.

Khanna (D-Calif.) toldThe Washington Post that "it would be political malpractice to have students repay student loans under Biden when Trump provided the relief," noting that the repayment freeze began under the former president—though the Trump administration also attempted to preemptively sabotage any effort by the Biden Education Department to unilaterally cancel student debt.

"The White House must figure out how to make sure there is an extension on the moratorium," Khanna said.

The Post's Jeff Stein reported Friday that Khanna "has told Biden administration officials, including Education Secretary Miguel Cardona, to press forward with a new plan to cancel student debt should the court invalidate Biden's existing plan," which would wipe out up to $20,000 in federal student loan debt per borrower.

Khanna confirmed to the Post that he has made such a push. Stein reported that Pressley (D-Mass.) and Ocasio-Cortez (D-N.Y.) have "privately made similar remarks to administration officials."

"Spokespeople for Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.)—two outspoken advocates for student debt relief — declined to comment on if they are urging the White House to prepare a backup plan," Stein wrote. "Ocasio-Cortez and Pressley also declined to comment."

Heightening the urgency of calls for a backup plan is the fact that, under newly passed debt ceiling law negotiated by House Republican leaders and the Biden White House, the student debt repayment pause is set to end in late August.

The law, which could complicate any future effort by the Biden administration to implement a new moratorium, sets the stage for a nightmare scenario the Supreme Court blocks student debt cancellation and payments resume, leaving already struggling borrowers with hundreds of dollars in additional obligations each month.

The Consumer Financial Protection Bureau warned earlier this week that millions of student loan borrowers are behind on other debt payments and "have risk factors that suggest they could struggle when scheduled payments resume."

During oral arguments earlier this year, the Supreme Court's conservative supermajority signaled it is poised to side with right-wing challengers and strike down the Biden administration's debt cancellation program.

A decision from the high court is expected before the end of the month, but the White House has yet to provide any indication that it has an alternative plan.

In a statement to the Post, White House spokesman Abdullah Hasan said the administration remains "confident in our legal authority to provide relief under the HEROES Act."

Student debt campaigners have outlined what a viable backup plan could look like.

For months, advocates have criticized the Biden administration for opting to use more limited emergency authority under the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 instead of invoking the Higher Education Act of 1965 to cancel federal student loan debt, which is carried by more than 40 million people in the U.S.

"Biden could have directed the education secretary to cancel people's debts using the 'compromise and settlement' authority granted in the Higher Education Act of 1965, but instead his administration invoked a different and more limited legal authority," Astra Taylor, a co-founder of the Debt Collective, wrote for The Guardian late last year.

"They also chose to make borrowers apply for the program, instead of automatically issuing cancellation—a slow-moving process that bought their billionaire-backed opponents valuable time to cook up legal arguments, find plaintiffs, and line their cases up with sympathetic, Trump-appointed judges poised to toe the conservative line," Taylor added. "The White House needs to learn from its mistakes and play hardball."

In June 2021, more than a year before Biden unveiled his debt relief plan, the Debt Collective released a draft executive order that would cancel all outstanding federal student loan debt using Higher Education Act authority.

"President Biden can cancel all federal student loan debt with a simple executive order. So, we wrote the entire executive order for him," the group said at the time. "It's not a magic trick. With the flick of his pen, he can make all federal student loan debt disappear."