WASHINGTON — President Joe Biden on Friday announced new steps aimed at helping borrowers repay student loans after the Supreme Court invalidated his debt relief plan.
Biden outlined new repayment options that would be available to millions of borrowers, as well as his administration’s plan to provide broader relief.
The president said that once student loan repayments begin on Oct. 1 — after a three-year pause that began during the Covid pandemic — borrowers will have the opportunity to enroll in a temporary 12-month “onramp repayment program” that will remove the threat of default.
“During this period, if you can pay your monthly bills, you should,” Biden said in brief remarks from the White House. “But if you cannot, if you miss payments, this onramp will temporarily remove the threat of default or having your credit harmed, which can hurt borrowers for years to come.”
The Department of Education will not refer borrowers who have missed payments to credit agencies during this period, Biden said.
“We know that figuring out how to pay these added expenses can take time for borrowers, and they might miss payments on the front end as they get back into repayment,” he added. “Normally, this can lead borrowers to fall into delinquency and default.”
This plan would be different from the student loan pause initiated in 2020 by then-President Donald Trump and extended several times by Biden. Under that program, which continues for the next few months, interest has not accrued since monthly payments have not been required.
Biden also announced changes to caps on the percentage of discretionary income paid toward student debt. Going forward, no borrower will need to pay more than 5% of their discretionary income on undergraduate loans, down from the previous cap of 10% each month.
More broadly, Biden said, his administration would work to provide student debt relief to “as many borrowers as possible, as quickly possible” through the 1965 Higher Education Act. He said that doing so would allow Education Secretary Miguel Cardona to “compromise, waive or release loans under certain circumstances.”
The Supreme Court on Friday rejected the Biden administration’s arguments that his student loan plan was lawful under a 2003 law called the Higher Education Relief Opportunities for Students Act, or HEROES Act. The law states that the government can provide relief to recipients of student loans when there is a “national emergency,” allowing it to act to ensure people are not in “a worse position financially” as a result of the emergency.
During his remarks, Biden called the Supreme Court’s student loan decision a “mistake” and “wrong.” He also criticized Republicans, saying they could not “bear the thought” of providing relief for working and middle-class Americans.
When asked by a reporter if he had given borrowers “false hope” on loan forgiveness, Biden pointed the finger at Republicans.
“I didn’t give borrowers false hope, but the Republicans snatched away the hope that it was,” Biden said.

Nbcnews