President Joe Biden is offering an alternative student debt plan designed to ease borrowers’ threat of default if they fall behind on their payments, after the Supreme Court struck down his original initiative.
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00:00 I believe the court's decision to strike down
00:01 my student debt relief program as a mistake was wrong.
00:04 I'm not going to stop fighting to deliver borrowers
00:08 what they need, particularly those
00:10 at the bottom end of the economic scale.
00:12 So we need to find a new way,
00:15 and we're moving as fast as we can.
00:18 First, I'm announcing today a new path
00:21 consistent with today's ruling to provide student debt relief
00:25 to as many borrowers as possible,
00:26 as quickly as possible.
00:28 We will ground this new approach in a different law
00:31 than my original plan, the so-called Higher Education Act.
00:34 That will allow Secretary Cardona,
00:38 who's with me today, to compromise, waive,
00:41 or release loans under certain circumstances.
00:44 This new path is legally sound. It's going to take longer,
00:48 but in my view, it's the best path
00:49 that we manage to providing for as many borrowers
00:52 as possible with debt relief.
00:53 I've directed my team to move as quickly as possible
00:56 under the law.
00:57 Just moments ago, Secretary Cardona took the first step
01:00 to initially -- to initiate that new approach.
01:03 We're not going to waste any time on this.
01:05 We're getting moving on it. It's going to take longer,
01:07 but we're getting at it right away.
01:09 Second, we know what many borrowers will need
01:12 to make their hard choices,
01:13 which their -- which their budgets are being strained now
01:17 when they start to repay their monthly loan payments this fall.
01:20 You know, we know that figuring out
01:23 how to pay these added expenses can take time for borrowers,
01:27 and they might miss payments at the front end
01:29 as they get back into repayment.
01:31 Normally, this could lead borrowers
01:33 to fall into delinquency and default,
01:35 but without their financial --
01:37 it would hurt their financial security,
01:39 and that's not good for them or the economy.
01:41 That's why we're creating a temporary 12-month --
01:44 what we're calling "on-ramp repayment program."
01:48 And now, this is not the same as a student loan pause.
01:52 It's been in effect for the past three years.
01:56 Monthly payments will be due, bills will not go out,
01:59 and interest will be accruing.
02:01 And during this period, if you can pay your monthly bills,
02:03 you should.
02:05 But if you cannot, if you miss payments,
02:07 this on-ramp will temporarily remove the threat of default
02:10 or having your credit harmed,
02:13 which can hurt borrowers for years to come.
02:15 Because the Department of Education
02:17 won't refer borrowers --
02:18 and the reason why that will work --
02:20 they won't refer borrowers who missed payments
02:23 to credit agencies for 12 months
02:25 to give them a chance to get back up and running.
02:27 Today's decision has closed one path.
02:28 Now we're going to pursue another.
02:31 I'm never going to stop fighting for you.
02:33 We'll use every tool at our disposal
02:36 to get you the student debt relief you need
02:38 and reach your dreams.
02:39 It's good for the economy. It's good for the country.
02:42 It's going to be good for you.
02:44 Thank you very, very much for listening.
02:46 We're going to get this done, God willing.
02:49 Thank you.
02:50 >> The Press: Mr. President, why did you give millions
02:51 of borrowers false hope?
02:53 You've doubted your own authority here in the past.
02:55 >> The President: I didn't give any false hope.
02:58 The question was whether or not
03:00 I would do even more than was requested.
03:02 What I did, I thought was appropriate
03:05 and was able to be done and would get done.
03:07 I didn't give borrowers false hope,
03:09 but the Republicans snatched away the hope
03:12 that they were given, and it's real.
03:14 Real hope. Thank you.
03:15 >> The Press: Mr. President, did you cancel student debt?
03:17 >> The Press: Mr. President, did you overstep your authority?
03:18 Did you overstep your authority?
03:20 >> The President: I think the court misinterpreted
03:22 the Constitution.
03:23 >> The Press: Mr. President, do you want to be
03:25 the failer in Afghanistan?