There's 'absolutely still a chance' student-loan borrowers will get broad debt cancellation, AOC say

August 2024 · 3 minute read
2023-09-19T15:37:09Z

Rep. Alexandria Ocasio-Cortez has some reassuring words for student-loan borrowers concerned about the prospect of broad debt relief.

On Monday night, Ocasio-Cortez took to her Instagram story to answer questions about the current state of affairs in Congress — particularly a government shutdown — and what's next for student-loan borrowers. At the end of June, the Supreme Court struck down President Joe Biden's first attempt at broad student-loan forgiveness using the HEROES Act of 2003, which allows the education secretary to waive or modify student-loan balances with a national emergency, like COVID-19.

While the Supreme Court ruled the administration does not have the authority to use that law for broad relief, the Education Department announced the same day as the decision it would be attempting relief using the Higher Education Act of 1965, instead. That law does not rely on a national emergency, but it does mean the administration has to go through a lengthy process known as negotiated rulemaking, during which the department holds negotiations and public hearings.

Ocasio-Cortez said borrowers shouldn't rule that option out.

"There is absolutely still a chance of cancellation," she said on her Instagram story on Monday. "When the Supreme Court struck it down, they said that the administration couldn't use a specific avenue, namely the HEROES Act, but there are alternative avenues that we have pursued. They are going to be laying out that program over the course of the next year."

"Cancellation is not a done deal whatsoever," she added.

However, she did blame Republicans for the student-loan payment resumption next month. To appease the GOP, the bill to raise the debt ceiling that Biden signed into law in the beginning of June included a provision that codified the end of the student-loan payment pause. Interest began accruing on federal balances on September 1, and bills are due in October.

"That was when Republicans forced the restarting of student loan payments on October 1, and that they forced that to happen by law in a couple of weeks," Ocasio-Cortez said. "You can thank a Republican for student loan payments restarting."

As Insider has previously reported, the negotiated rulemaking process could take at least a year. Bharat Ramamurti, deputy director of the National Economic Council, said during a July press briefing that "you have to intake the comments that you get from the public, and then you have to decide whether to change your proposal accordingly before you do the next public hearing." 

"But we are aiming to do it as quickly as possible," he added. "And so, we will give you more updates as we hit each milestone in that process."

Still, the new plan could face legal challenges yet again — and Republican lawmakers have already introduced legislation to overturn Biden's targeted reforms for borrowers, specifically his new SAVE income-driven repayment plan. Regardless of the hurdles the broad relief could face, a group of Democratic lawmakers want borrowers to see a reduction to their balances as soon as possible.

"We appreciate your announcement initiating a rulemaking under the Higher Education Act of 1965 to deliver on debt relief," 87 Democratic lawmakers recently wrote to Biden, "and write to urge you to swiftly carry out your commitment to working and middle class families, and cancel student debt by early 2024."

Watch: Why student loans aren't canceled, and what Biden's going to do about it

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