After the Supreme Court struck down Biden’s proposed student loan forgiveness plan, the administration is promising new paths for helping borrowers.

On June 30 – the final day of its latest term – the highest court in the land ruled that the White House’s student debt relief program is unconstitutional. No longer will debtors be able to wipe $10-20,000 from their account balances, as previously promised.

That same day, the administration announced three new plans of action to soften the blow for borrowers. In addition to pursuing a legal workaround for debt relief, the government will lower debtors’ monthly payments, and ease the responsibility for on-time payments.

“President Biden and Vice President Harris will not let Republican elected officials succeed in denying hardworking Americans the relief they need,” the White House wrote in its statement.

Biden’s new loan forgiveness plan

The executive branch’s new student debt relief plan can be broken down into three parts.

First, the Department of Education has founded a committee dedicated to proposing new, legal regulations for student debt relief.

Second, the White House finalized its Saving on a Valuable Education (SAVE) plan. As it explained in its announcement, SAVE “will cut borrowers’ monthly payments in half, allow many borrowers to make $0 monthly payments, save all other borrowers at least $1,000 per year, and ensure borrowers don’t see their balances grow from unpaid interest.” All student loan borrowers will be able to sign up for SAVE later this summer.

The final change will affect late payments, once payments resume this Fall.

Three years ago, the government paused student loan payments and collections on defaulted loans, as part of COVID-19-related economic relief. The payments and collections will resume on September 1.

To ease the transition, the government will allow a 12-month “on-ramp” – from October 1, 2023 to September 30, 2024 – where late monthly payments will not be penalized. So debtors won’t have to worry about credit agencies or collectors coming after them until October, 2024.

The impact of debt relief (or lack of it)

In January, the White House provided a sense of scale for just how significant its debt relief would be. In a fact sheet, it revealed that 26 million people had applied, or were otherwise deemed automatically eligible for a $10-20,000 discount on their loans.

Of those 26 million, 16.5 million had their applications fully approved and forwarded on to loan servicers. That figure would’ve been higher if not for the fact that last November, “less than a month after the application was first released – the Department was required to stop accepting applications as a result of lawsuits brought by opponents of the program. Loan servicers were thus prevented from discharging any debt,” the White House explained.

Because around 8% of the U.S. population currently owes student loans, any relevant laws and policies will affect not just loanees, but the economy as a whole.

And, of course, it’ll affect Biden’s run for president. In a Friday news conference, he stated, simply: “I think the court misinterpreted the Constitution.”