What President Joe Biden is selling as a win for student loan borrowers in the debt ceiling deal is actually a forfeiture of his own authority to help debtors and a ticking time bomb for tens of millions of Americans. Biden could still move to save his student debt cancellation agenda from conservative sabotage — but instead his administration has been downplaying the threat and assuring borrowers that everything is going to be just fine.

Student loan payments have been on pause for the past three years, as part of a COVID-era relief program initiated by former President Donald Trump. In one of a series of concessions to Republicans during the recent debt ceiling standoff, Biden must restart student loan payments by the end of this summer.

That means more than 40 million Americans will be once again crushed by debt, but it also strips Biden of his best tool to defend his broader student debt cancellation program: delay. His order to cancel up to $20,000 in debt for federal borrowers is expected to be struck down by the Supreme Court any day now — making it an inopportune moment for Biden to relinquish his power to extend the payment pause.

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Democrats could have avoided this scenario. But they refused to get rid of the debt ceiling, an arbitrary limit on government borrowing, when they controlled the House and Senate during the first two years of Biden’s term. Then, instead of bypassing it unilaterally using executive authority, Biden chose to negotiate with Republicans, making major concessions — including his own power to keep the student loan payment pause in place — to raise the ceiling for just two years. In doing so, Biden may be cementing his decades-long legacy as a defender of student debt.

There are still tools available to Biden to enact his student debt program, but the options are limited, and the time left to move on them is dwindling.

“We have moved mountains to get to this point,” said Thomas Gokey, co-founder of the Debt Collective, a debtors’ union that has been pushing for universal student debt cancellation. “To have the whole thing sabotaged by the Biden administration is a bitter, bitter pill.”

“He Rolled Out The Red Carpet For Republicans”

Biden’s student debt cancellation program began with a campaign trail promise, and is now turning into a pipe dream as the president negotiates away his own power to provide relief to borrowers.

When Congress was negotiating a COVID relief package in March 2020, Biden argued from the campaign trail that the bill should cancel a minimum of $10,000 in debt per federal borrower. The legislation Trump ultimately signed didn’t cancel any student debt, but it paused payments and interest accrual.

Biden promised additional relief. At a town hall just before the November election, he told voters, “I’m going to make sure everyone gets $10,000 knocked off of their student debt.”

Finally, in August 2022, after more than a year of pressure to fulfill his campaign promise, Biden signed an executive order that canceled $10,000 in debt for some federal borrowers and up to $20,000 for Pell Grant recipients.

But the cancellation didn’t go into effect right away, because Biden means-tested the cancellation, which meant it only applied to people who made less than $125,000 per year, and required debtors to submit applications to claim relief — a time-consuming process. In the meantime, conservative found plaintiffs who were willing to sue to block Biden’s plan.

“They didn’t even start the application process until a month after they made the initial announcement,” said Luke Herrine, a law professor at the University of Alabama and student debt expert. “There was no reason for the delay, I think, except to see who decided to sue.” By waiting for lawsuits, explained Herrine, the administration could potentially adjust the program in response.

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But instead, the strategy made the program vulnerable. “If they had forced the Supreme Court to make a decision that didn’t just stop [the cancellation program] but actually forced the court to reenact debt, I think that would be a different situation,” said Herrine, because of the logistical challenge and potential political backlash of reimposing already-canceled debt.

In other words, said Gokey, “He rolled out the red carpet for Republicans to try to kill it.”

Biden’s cancellation program was halted in November by legal challenges before it took effect, and is likely to be struck down by the Supreme Court any day now — in a case that bypassed normal fact-finding procedures and stands on extremely dubious legal grounds.

In the meantime, more than 40 million Americans have not had to make any payments since March 2020 and interest has not accrued on their debts, because the payment pause has been renewed eight times since it began under Trump. It won’t be renewed again.

This week, Congress raised the debt ceiling through legislation that contained a number of key Republican priorities — including affixing new work requirements to food stamps and cash assistance, an increased military budget, funding cuts to the IRS, and an end to the payment pause by August 30.

Even so, Education Secretary Michael Cardona is calling the deal a win. “I applaud @POTUS for averting a crisis with this deal and for protecting our student debt relief plan in full,” Cardona tweeted after the deal was announced. “I thank President Biden and his team for looking out for the 40 million hard-working Americans who will benefit from student debt relief and protecting our new and improved Income Driven Repayment plan. We will continue fighting for student borrowers.”

Biden’s Last Best Shot At Cancellation

Even after Biden negotiated away his power to help tens of millions of student borrowers, he can still attempt to salvage his campaign promise.

If the Supreme Court strikes down his original order, Biden can cancel debt through a different avenue known as “compromise and settlement” under the Higher Education Act of 1965. Under this authority, the Education Secretary can enter into settlements with debtors to lower the amount they owe or cancel their debt altogether.

Conservatives would likely bring legal challenges to this authority, too, but it might have a better shot at surviving than his original debt-cancellation plan. Earlier this year, the Supreme Court denied a challenge to a compromise and settlement agreement that canceled $6 billion in debt for graduates of three for-profit schools.

Biden could also expand the existing income-driven repayment program, which allows debtors to make monthly payments based on their income and forgives their debt after a couple of decades. His Education Department is currently undergoing rulemaking for an income-driven repayment program that could reduce the monthly payments of many debtors and pave the way for full forgiveness in the long-run.

This effort could also face court challenges — which is why the clock is ticking on all of these options. That’s because if Biden does attempt one of these backup plans and it gets tied up in litigation, there’s no possibility this time around to extend the payment pause as a temporary solution while waiting for a court ruling.

Gokey of the Debt Collective fears that slow-walking the first round of debt cancellation and the debt ceiling deal have defanged the executive branch of its power to cancel debt. Combined with the imminent end of the yearslong loan pause, many student debtors may end up in a worse position than when Biden took office.

Some people might end up thinking this was Biden’s plan all along.

“There is a significant portion of people who take a cynical read on this and say, ‘Biden was never serious, that this was all a con game,’” Gokey said. “We began the Biden administration with a Swiss Army Knife of tools to cancel student debt, and we could end with no legal options to cancel student debt, not just under the Biden administration but for future administrations.”