July 13, 2023
Not long after the Supreme Court struck down White House plans to forgive student loan debt, President Biden and his fellow Democrats made it clear they aim to make the issue echo across the coming political season.
The calendar for both campaigns — the effort around student debt begins next week with a hearing on Biden’s "Plan B" for loan forgiveness — could be in the party's favor.
Federal student loan holders will face a final deadline to begin repayments right around 2024 election day. The legal fight around Biden’s backup effort at loan forgiveness is also certain to stretch throughout the coming campaign fight.
"This is a fight that is happening in parallel," says Persis Yu of a new Democratic-aligned group that launched just last week around the issue.
Party leaders are drawing another potential parallel between student loans and abortion. The voter backlash that followed the Supreme Court’s decision in Dobbs v. Jackson Women's Health Organization to end the Constitutional right to terminate a pregnancy contributed to historically strong midterms for the party.
"I put it in the same bucket as Dobbs," says Cornell Law professor K. Sabeel Rahman on student loans.
But the former Biden official and organizer acknowledges that his party nevertheless has a challenge. For one thing, student loan forgiveness is now an undelivered Biden campaign promise from 2020, and Supreme Court justices themselves are, of course, not on the ballot.
There is "a bit of a messaging challenge," he says.
While Rahman and other Democrats say they are optimistic about the role that student loans (as well as abortion) can play for them, others are not so certain that it will be such a clear-cut issue.
The polls around the issue also haven’t been a slam dunk for either side, with the American public tending to narrowly support forgiveness but not by overwhelming margins. An April poll from Reuters/Ipsos found 47% of Americans supported Biden's now struck-down plan to forgive a maximum of $20,000 in federal student loan debt. But another 41% were opposed.
Republicans have also hailed the high court's decision, pointing out that the 87% of Americans who don’t hold student loan debt might be less receptive to a campaign season focus on the issue.
A focus on student loans throughout 2024
When he walked into the Roosevelt Room of the White House after the Supreme Court's decision in June, Biden previewed his all but certain campaign message to come.
He said his administration tried to help borrowers but then Republicans and their allies on the court stepped in, "literally snatching from the hands of millions of Americans thousands of dollars in student debt relief that was about to change their lives."
The president then laid out his "plan B" which will ensure that the issue remains on the front burner for the next 16 months.
For a start, he announced that the first bill for federal loans is set to come due in November, just as the presidential primary season will be heating up. It will be the first time during Biden’s presidency that federal student debt holders will be faced with a bill.
But Biden also announced a gradual repayment "on-ramp" option for borrowers that is set to roll out for 12 months afterward into November 2024. Interest will accrue over those 12 months but not be immediately added to outstanding balances. Borrowers won’t be reported to credit bureaus during that time.
In addition, Biden is also making a second run at student loan forgiveness via a law called the Higher Education Act. It's an approach that, the President and his aides acknowledge, will take time to unfold.
"It’s going to take longer, but we’re getting at it right away," Biden said in June.
The first step in that process will be a virtual Education Department public hearing on July 18 for written comments which will then be followed by rule-making sessions this fall. After that, whatever administration plan emerges is sure to face legal challenges that could even take it back to the Supreme Court in 2024.
What the Democratic campaign effort will likely look like
Democrats previewed some of their campaign efforts to come with the formation of a new group last week called Protect Borrowers Action.
Yu is the group’s deputy executive director and told Yahoo Finance in an interview that the message is "we need to hold accountable the officials who have been pushing this effort, who have been benefiting politically from this effort."
The group plans to devote initial efforts to link select Republican members of Congress to the Supreme Court’s move.
The group, which has a snappy new video, has to also make the complicated case that these House members — who after all don't even offer confirmation votes for Supreme Court justices — are nevertheless responsible.
Its argument centers around an amicus brief organized by Republicans that urged the court to strike down the debt relief program and two votes earlier this year in a similar vein.
The group is beginning with a focus on 13 House Republicans, but it appears unlikely to end there. Yu says that "we have broader ambitions and we're going to see where this takes us."
Ben Werschkul is a Washington correspondent for Yahoo Finance.