AOC says Biden’s new student loan forgiveness plan doesn’t go far enough

Rep. Alexandria Ocasio-Cortez, D-N.Y., said President Biden’s new plan to cancel federal student loan debt doesn’t go far enough. 

The Biden administration went back to the drawing board last week after the Supreme Court canceled Biden’s student loan debt handout, ruling that Congress would have to explicitly authorize such a program. Biden said the court “misinterpreted the Constitution” and on Friday presented a “work-around” plan that will provide a 12-month “on-ramp” intended to help borrowers struggling to resume repayment. 

Ocasio-Cortez was unsatisfied with the terms of this plan, and told CNN’s Dana Bash on “State of the Union” Sunday that the president should suspend interest on debt payments through the year-long period. 

“I would like to see interest payments suspended during this time, especially during that 12-month ramp-up period,” Ocasio-Cortez said. “There are millions of people in this country that have student loan debt under…  $10,000 or $20,000, as outlined in the plan.”

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“People should not be incurring interest during this 12-month on-ramp period,” she continued. “So, I highly urge the administration to consider suspending those interest payments. Of course, we still believe in pursuing student loan cancellation and acting faster than that 12-month period wherever possible.” 

Biden’s new plan invokes the Higher Education Act (HEA), which includes a provision that allows the secretary of Education to compromise, waive or release federal student loans.

“It’s legally sound, but it will take longer to bring relief to many borrowers,” Biden said Friday. 

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At the president’s direction, the administration is creating a temporary 12-month “on-ramp” to repayment. Monthly payments and interest will accrue during this time, but borrowers that can’t pay can use the on-ramp to avoid hurting their credit.

“This is not the same as the student loan pause, but during this period – if you miss payments – this ‘on ramp’ will temporarily remove the threat of default or having your credit harmed,” Biden said.

Ocasio-Cortez said several Democratic members of Congress have been urging to use the HEA, claiming that Congress gave the administration the authority to forgive student loan debt. 

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“Myself, as well as other members of the Congressional Hispanic Caucus, met with the White House recently around this plan, as well as many other advocates in the space as well,” she said. 

“And we truly believe that the president – Congress has given the president this authority. The Supreme Court is far overreaching their authority. And I believe, frankly, that we really need to be having conversations about judicial review as a check on the courts as well.” 

The now-defunct student loan forgiveness plan Biden proposed last year would have canceled up to $20,000 in loans for Pell Grant recipients and $10,000 for other borrowers with incomes less than $125,000.