Borrowers left reeling after Supreme Court decision: Student loans are like a 'pressure cooker that lasts your entire life'

President Joe Biden is joined by Education Secretary Miguel Cardona as he announces new actions to protect borrowers after the Supreme Court struck down his student loan forgiveness plan, in the Roosevelt Room at the White House in Washington, D.C., on June 30, 2023.
Chip Somodevilla | Getty

After describing Friday's Supreme Court ruling against student debt relief as "unthinkable," President Joe Biden announced he'd find a new way to ease the burden of student loan payments.

During a White House press conference, Biden said that the court ruling "misinterpreted the constitution" and vowed to find a new path for student relief that's "consistent with today's ruling."

Biden said he will enact a new regulatory process to provide further student debt relief under the Higher Education Act, the federal law that governs federal student financial aid.

This differs from the executive action struck down on Friday, which was under the authority of the Higher Education Relief Opportunities for Students Act of 2003, or the HEROES Act.

Biden also announced a 12-month "on ramp" for student loan repayment, in which the Department of Education won't refer borrowers to credit agencies for 12 months. This will help borrowers avoid default and keep them from harming their credit scores.

Borrowers left reeling after Friday's Supreme Court decision

While Biden said the "fight is not over" in his press conference, student borrowers who spoke to CNBC Make It were disheartened about the Supreme Court ruling earlier in the day.

Shayna Stevens, 31, says she's "extremely disappointed" by the setback, both as a borrower with student loan debt and in her capacity as co-executive director of the Arizona Students' Association, which advocates for student loan relief.

Stevens has $40,000 in student loan debt after graduating with a bachelor's degree in secondary education from Northern Arizona University in 2015. She would have qualified for $20,000 in student debt relief if the Biden administration's executive action had been allowed to proceed.

"Not having that payment allowed me to save money for the first time ever," says Stevens.

Despite the ruling, she doesn't see the issue of debt relief going away, especially with another presidential election in 2024. All options should be considered, whether that's more executive action or through legislation, she says.

If you plan on running for president, you're going to have to have a plan for student loan debt forgiveness.
Shayna Stevens
Co-executive director of the Arizona Students' Association

"Young people did an amazing job last election making this an election issue. Every politician running for president was talking about student loan debt," she says.

"If you plan on running for president, you're going to have to have a plan for student loan debt forgiveness."

Farzad Kapadia, 41, was also disappointed by Friday's Supreme Court ruling. When the student loan payment freeze expires in October, he will have to start making monthly payments of about $800 on $130,000 on federal student loans.

Kapadia, who has a master's in international affairs from The New School in New York City, says he was able to put money aside for savings for the first time since he graduated in 2010.

While Kapadia is on an income driven repayment plan that's supposed to reduce his burden, the interest costs prior to the freeze still had him living paycheck to paycheck.

Financially, "It's a pressure cooker that lasts your entire life," he says. Despite working steadily since he was 25, he feels like he's being punished, as if getting an education was a "malicious act of profiteering."

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